Italy: Developing our Second Home Market - BNP Paribas

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Italy: Developing our Second Home Market - BNP Paribas

BNP Paribas

Investor Day

Italy: Developing our Second Home Market

Baudouin Prot

Chief Executive Officer

Rome, December 1 st 2006


BNP Paribas

Strategy in Italy

Jean-Laurent Bonnafé

BNL Chief Executive Officer

Rome, December 1 st 2006


Disclaimer

Disclaimer

This presentation includes forward-looking statements based on current beliefs and expectations

about future events. Forward-looking statements include financial projections and estimates and

their underlying assumptions, statements regarding plans, objectives and expectations with respect

to future events, operations, products and services, and statements regarding future performance

and synergies. Forward-looking statements are not guarantees of future performance and are

subject to inherent risks, uncertainties and assumptions about BNP Paribas and its subsidiaries and

investments, developments of BNP Paribas and its subsidiaries, banking industry trends, future

capital expenditures and acquisitions, changes in economic conditions globally or in BNP Paribas

principal local markets, the competitive market and regulatory factors. Those events are uncertain;

their outcome may differ from current expectations which may in turn significantly affect expected

results. Actual results may differ materially from those projected or implied in these forward-looking

statements. Any forward-looking statement contained in this presentation speaks as of the date of

this presentation: BNP Paribas undertakes no obligation to publicly revise or update any forwardlooking

statements in light of new information or future events.

The information contained in this presentation as it relates to parties other than BNP Paribas or

derived from external sources has not been independently verified and no representation or

warranty expressed or implied is made as to, and no reliance should be placed on the fairness,

accuracy, completeness or correctness of, the information or opinions contained herein. None of

BNP Paribas or its representatives shall have any liability whatsoever in negligence or otherwise for

any loss however arising from any use of this presentation or its contents or otherwise arising in

connection with this presentation or any other information or material discussed.

The English version prevails

3


Presentation Overview

Strategy in Italy

Progress to Date

Next Steps


Invest for Growth

Revitalise BNL’s

strong national

franchise

Strategy in Italy

Boost

BNP Paribas

existing activities

Add a powerful

distribution

network to

world-class

product factories

Growing Profitably in Italy

Control costs

Optimise

efficiency of

Italian

corporate centre

and operations

Three mutually reinforcing levers

5


Lombardia

Valle d’Aosta

Emilia

Romagna

Piemonte Liguria

Marche

Toscana

Umbria

Abruzzo

Lazio

Molise

Puglia

Campania

Basilicata

Sardegna

Sicilia

Strategy in Italy

Trentino Altoadige

Priuli Venezia

Giulia

Veneto

Calabria

BNL

A Nation-wide Franchise

Personnel headcount

Branches

Retail branches

Private centres

Corporate and P.A.* centres

Specialised subs. centres

Client base

Individuals

Private Banking

Small Business

Corporate and P.A.*

A unique opportunity in in the Italian market

17,000

895

703

18

80

94

2.7mn

2.5mn

11,000

112,000

55,000

* Public Administrations

6


Revenues / RWA

in %

Strategy in Italy

6.9*

Unicredit

Cost / income

in %

54.8

Unicredit

55.0

Banca Intesa

MPS

(Source: 2005 company reports)

5.9 5.8 5.6 5.4 5.3 5.3 5.1

Capitalia

55.9

Antonveneta

San Paolo IMI

56.1

BPVN

BPVN

57.0

San Paolo IMI

BNL

A Strong Upside Potential

Banca Intesa

58.0

BPU

Antonveneta

61.3

Capitalia

BPU

64.8

MPS

4.2

BNL

66.3

BNL

3.8

Banca Pop. It.

67.3

BPI

* 2004 figures

7


Fleet Management

Insurance

Strategy in Italy

Leasing

Asset Management

BNP Paribas in Italy before BNL

Consumer Finance*

Real Estate Services

A full range of of powerful platforms with

significant market positions

* 50/50 JV with Cassa di Risparmio di Firenze

Residential

Mortgages

Custody & Clearing

Private Banking

Corporate &

Investment Banking

8


Strategy in Italy

After BNL’s Acquisition

Our Ambitions for Italy

Develop BNP Paribas second domestic market in Europe

Become leader in Investment Banking in Italy

Strengthen our already significant market share in

Asset Management and Specialised Financial Services

Improve profitability by optimising quality of service, cost

efficiency and risk management

A new key player

in in the Italian banking market

9


Strengthen sales

forces by

introducing new

tools, techniques

and supports

Strategy in Italy

Retail & Private

Focus on Innovation and Quality

Set up real

multichannel

distribution

Dedicate sales

forces through

advanced

segmentation

Revamp and

reinforce the

network

through branch

renewals and

openings

A unique combination among Italian banks

10


Revamping of

the Corporate

Centres

Strategy in Italy

Corporate Clients

Leverage on BNL’s Important Client base

Enhance

relationship

intensity through

best practice

marketing

monitoring

Dedicate

coverage to

Mid-Corporate

and

Public

Administration

An enhanced platform

to address corporate clients needs

Cross-selling with

CIB and IRFS of

specialised

business lines

11


Large Corporates and Institutionals

Roll-out Product Offer to a Larger Customer Base

Strengthen

Coverage

CIB CIB coverage

extended to to all all large

Corporates and and

Institutionals

Numerous cross

selling opportunities

with Retail and and

Corporate Divisions

Strategy in Italy

Reinforce Local

Teams to to Enhance

Product Delivery

Top-notch financial

solutions (Capital

Markets, Corporate

Finance,…) to to support

the the development of of

Italian customers

The only CIB European leader

with a strong local presence in Italy

Provide Global

Access

Full Full access to to CIB CIB

global platforms

Unparalleled global

reach (presence in in 85 85

countries)

12


AMS and IRFS

A Larger Client Base for Successful Product Factories

Strategy in Italy

Unit Linked 4WD

Developed by BNP PAM

Distributed by BNL

€600mn in 3 weeks

Early example of of marketing success with AMS

13


Corporate

Functions

ALM already fully fully

integrated within BNP

Paribas framework

Credit control and and risk risk

management to to be be

aligned on on BNP Paribas

practices

Procurement gains

*BNL SpA.

Strategy in Italy

Central

Platforms

IT IT development methods

improved to to focus on on

business support

Merge BNL CIB CIB

activities into into BNP

Paribas platforms

Rationalisation of of

headquarters structure

Human Resources

Improved Efficiency

Network

Restructuring of of

commercial branch

organisation

Back Office organisation

redesign

2,200 staff departures* combined with with 900 900 hires over 3 years

Full Full training programs and and HR HR support in in place

Agreement reached with with trade unions on on the the basis of of BNL constructive

long-term relationship

14


Presentation Overview

Strategy in Italy

Progress to Date

Next Steps


BNL

acquisition

announced

Strategy in Italy

Investor Day

February April July Sept. Nov. Dec.

BNP Paribas

controls BNL

New governance rules

Presentation of the

development plan to

500 executives

Strong Momentum

Launch of

2007 Commercial

Action Plan

Agreement with

trade unions

Detailed development

plan finalised

16


Strategy in Italy

BNP Paribas-BNL

Corporate &

Investment Banking

Asset Management

& Services

BNP Paribas AM,

Cardif, BNL Vita*

BNL Gestioni, BNL

Fondi Immobiliari

New Business Organisation

BNL

banca commerciale

Corporate Division

Retail & Private Division

International Retail

Banking and Financial

Services

ARVAL, BPLG-Locafit

UCB, Findomestic*

BNP Paribas in in working order in in Italy

* Findomestic : 50/50 JV with Cassa di Risparmio di Firenze; BNL Vita 50/50 JV with Unipol

17


Nord

Ovest

Toscana

Umbria Marche

Abruzzo

Sardegna

Lazio

Strategy in Italy

Lombardia

Sicilia

Campania

Basilicata

Calabria

Triveneto

Emilia

Romagna

New Business Organization

A More Efficient Territorial Set-up

Current: 12 “Aree Territoriale” Target: 5 Regions

Puglia

Molise

Nord Ovest

(Milano)

Centro

(Firenze)

Lazio e

Sardegna

(Roma)

Nord Est

(Bologna)

Sud

(Napoli)

Give the regions more autonomy and initiative

18


Appointment of 1st / 2nd line

of management

in June/July:

New appointment:

N. D’Anselmo

as head of

BNP Paribas-BNL CIB

Strategy in Italy

All main Appointments Made and

Know-How Transfer Underway

2 nd wave of

appointments in

September/December

New entrance:

S. Calderano

as new head of

Retail & Private

Around 800 people

from BNL and from BNP

Paribas involved in

integration working groups

Ca. 30 professionals

from BNP Paribas

and 30 from BCG

integrated in BNL

Management and staff heading for growth

19


Strategy in Italy

Streamlining day to day Management

Alignment within BNP Paribas’ governance rules

Empowerment of the line managers

Full powers given to the Management by the Board

Simplified and more business-oriented managerial approach

Example: request and treatment of bottom up indication of

bottlenecks in the Retail network

A more flexible and responsive organisation

20


Presentation Overview

Strategy in Italy

Progress to Date

Next Steps


Commercial Action Plan

for 2007 for each

business area

Kick off 11-12

December

in line managers’

conventions

Strategy in Italy

Launch pilots

(Retail, Corporate, Back

Offices)

First regions

reorganized by March

2007

The Steps Ahead

Implement further

quick wins

Before mid-2007

Shifting from planning to to execution:

from 170 working groups to to 450 projects

22


Total synergies 2009

(impact on gross operating income)

in €mn

Strategy in Italy

400

150

250

Synergies Reviewed Upwards

+20%

480

210 Net Revenue

Synergies

270

More ambitious targets

on on the the basis of of the the bottom-up analysis

Cost Synergies

23


Strategy in Italy

Successful Integration Underway

Integration proceeding at at a fast pace

Motivated teams committed to to deliver ambitious

targets

2007 commercial plan ready to to go

go

24


BNP Paribas

Strategy in Italy

Financial Elements

Angelo Novati

BNL Chief Financial Officer

Rome, December 1 st 2006


Presentation Overview

Introduction

From Gruppo BNL to BNL bc

Restructuring Costs and Balance Sheet Adjustments

Details on Synergies

Conclusion


Combine

BNP Paribas

and BNL

teams and

figures

P&L harmonisation

Headcounts and

P&L figures

provided to each

workgroup

Financial Elements

Apply base

line growth

scenario

Assumptions

based on BNL IBES

consensus

+5.8% revenue

base line CAGR

+2.3% costs

base line CAGR

Quantify

revenue and

cost

synergies

Phase 1 (May-July) Phase 2 (Sep-Dec)

45 taskforces,

250 people involved

€270mn

Cost synergies

€210mn

Net Revenues

synergies

A Powerful Process

170 workgroups, about

800 people involved

Implement

Monitoring of

achievements by

project

Synergies by core

business to be

reported on a

quarterly basis

27


Presentation Overview

Introduction

From Gruppo BNL to BNL bc

Restructuring Costs and Balance Sheet Adjustments

Details on Synergies

Conclusion


Financial Elements

BNL 9M06

In €mn

Revenues

Costs

Gross Op. Income

Cost of risk

Operating Income

Pre-Tax Income

From Gruppo BNL to

BNL Group Contribution

Group

contribution

incl 1Q06 proforma

2,233

(1,400)

833

(245)

Not comparable with BNL published accounts

Detailed reconciliation in appendix

Costs: 9M usually understates the yearly trend

“Seasonal” effect

Cost of risk: higher in Group contribution than under Italian practices

Provisions time value for money: reducing cost of risk under Italian practices

vs. increasing revenues under BNP Paribas practices

Provisions for credit-related litigations: in costs under Italian practices vs. in

cost of risk under BNP Paribas practices

588

579

29


Cost of risk

Italian practices

in bp

32

Financial Elements

48

BNL 9M06* Peers** 9M06

Cost of Risk

A Different Benchmark

Cost of risk

Group contribution

Under Italian practices, BNL cost of risk lower than peers

Due to high level of write-backs since 2005

Group contribution not comparable with Italian peers

9M06 BNL cost of risk to be broken down between

Low cost of risk in activities to be transferred to CIB and IFRS

65 bp in retail and commercial banking (BNL bc)

* excluding the one off impact of alignment to BNP Paribas balance sheet adjustments (€378mn)

** Peers’ average includes Banca Intesa, Capitalia (as published), Unicredit, San Paolo IMI, MPS (BNL estimates)

in bp

56

65

BNL 9M06 BNL bc 9M06

Cost of of risk risk optically higher than under Italian practices

30


9M 06 Revenues*

Before Reorganisation

2,233

1279

BNL

contribution

346

Financial Elements

129

in €mn in €mn

*including proforma 1Q06 figures

BNL Contribution

BNP Paribas Italy

AMS

From BNL Group Contribution to

BNL bc - A New Revenue Split

142

9M 06 Revenues*

After Reorganisation

1,870

15

1,855

1279

346

74

119

52

365

137

228

BNL bc IRFS AMS CIB Corporate

Centre

Creation of a new BNL banca commerciale core business (BNL bc)

dedicated to Retail and Corporate activities

Re-allocation of revenues, costs, cost of risk and allocated capital of

the other BNL activities to relevant BNP Paribas core businesses

420

171

24

31


Revenues

Costs

Gross Op. Income

Cost of risk

Operating Income

Pre-Tax Income

Cost/Income ratio

RWA (9M average)

Financial Elements

BNL

contribution

2,233

(1,400)

From BNL Group Contribution to

BNL bc - Future Disclosure

833

(245)

588

579

62.7%

€66.3bn

9M06

In €mn

BNL bc

1,870

(1,247)

623

(228)

395

386

66.7%

€47.1bn

BNL bc will become the standard for reporting starting January 1 st 2007

32


Presentation Overview

Introduction

From Gruppo BNL to BNL bc

Restructuring Costs and Balance Sheet Adjustments

Details on Synergies

Conclusion


Other

15%

IT and

reengineering

49%

Financial Elements

Restructuring Costs

by 2009

€410mn

HR

36%

Restructuring Costs

Restructuring Costs

Expected Timing

in €mn

152

129 129

2006 2007 2008

Total restructuring costs revised to €410mn down from €450mn

Lower than expected HR restructuring costs

Reduction impacting 2006 exclusively

Actual amounts charged will be disclosed quarterly in the

BNP Paribas Corporate Centre as operating expenses

Completion

34


Financial Elements

Purchase adjustments*

in €mn

378

308

Credit risk Early

Retirement

& Employee

Benefit

Balance Sheet Adjustments

100

Market

activities &

securities

23

Tangible &

int. assets

87

850

Other TOTAL

Balance sheet adjustments revised upwards from €800mn to €850mn

Due to higher contingent liabilities on BNL existing early retirements

schemes

Post tax impact €607mn

*Unaudited figures

35


BNP Paribas risk assessment methods applied to BNL

Limited need for new specific provisions

Widened scope of doubtful loans: integration of past due amounts

over 90 days

Coverage of both past due categories at 36% whilst negligible for peers

Enforcement of the BNP Paribas portfolio provisioning method

BNL coverage ratio already high in Italy and further increased

NPL + SUBSTANDARD +

RESTRUCTURED LOANS

58%

BNL

Dec05

59%

BNL

Jun06

Financial Elements

53%

Peers

average*

Jun06

20%

BNL

Dec05

36%

BNL

Jun06

*Peers’ average includes Banca Intesa, Unicredit, San Paolo IMI, Capitalia, MPS

Impaired Loan Coverage

Best Practice in Italy

PAST DUE > 180 days PAST DUE 90-180 days

6%

Peers

average*

Jun06

0%

BNL

Dec05

36%

BNL

Jun06

n.s.

Peers

average*

Jun06

36


Presentation Overview

Introduction

From Gruppo BNL to BNL bc

Restructuring Costs and Balance Sheet Adjustments

Details on Synergies

Conclusion


Gross Revenue

Synergies

-

Marginal Costs

=

Net Revenue

Synergies

Net Revenue Synergies by 2009

in €mn

Financial Elements

222

104

-118

31

20

-11

41

23

-18

63

-23

Revenue Synergies

Split by Business Line

210

-170

BNL bc IRFS AMS CIB Total by

2009

86

380

Main revenue synergies

generated by by BNL BNL bc bc and and CIB CIB

150

Acquisition

estimate

+40% vs

initial

estimate

38


Gross Revenue

Synergies

-

Marginal Costs

=

Net Revenue

Synergies

Financial Elements

Cumulative Revenue Synergies 2007-2009

in €mn

79

19

-60

224

109

-116

210

-170

2007 2008 2009

To be added to cost and revenue baselines

First wave of revenue synergies to be achieved by 2009

2007: include negative revenue synergies (€24mn in CIB)

2008: in line with initial forecasts; 2009: ahead

Revenue Synergies

Revised Timing

Marginal costs include “Piano Sportelli” net implementation costs

“Piano Sportelli”: 100 new branches by end 2009

Expected revenues to fuel a second wave of revenue generation

beyond 2009

380

39


IRFS

2%

AMS

5%

Total Cost Synergies by 2009

(by Business)

CIB

13%

Financial Elements

Total: €270mn

BNL

functions and

operations

80%

Increased Cost Synergies

Total cost synergies raised to €270mn compared to €250mn

announced at the time of acquisition

Agreement signed with the unions

2,200 staff departures over the period

IT

18%

Procurement

15%

Total Cost Synergies by 2009

(by Nature)

Other

9%

HR

58%

40


Financial Elements

Cost Synergies Progression

in €mn

38

100

185

Cost Synergies

Timing Accelerated

270

2006 2007 2008 2009

Initial timing forecast exceeded due to effectiveness of actions

already implemented

€38mn cost synergies in 2006 representing quick wins in

procurement and recruitments

Synergies to be deducted from cost baseline progression

41


Main Cost Efficiency Projects & Initiatives (1/2)

Organisation redesign

Integrating investment banking

activities under CIB core business

Integrating major affiliates and foreign

branches into BNP Paribas’ operating

structure

Rationalising headquarter functions

and reviewing reporting structure to

allow local management to be more

business-focused

Reviewing and simplifying branch

network organisation

Financial Elements

HR synergies

Trade union negotiations finalised for

BNL SpA

HR plan shared and agreed in details

with trade unions

Contained repercussions on staff as

shared objective with trade unions

Redundancies on a voluntary base

with contribution by BNL utilising

“Fondo ABI”

Training programme for staff involved in

functional mobility

Creation of HR co-ordination units

within the 5 regions

Improved flexibility and and efficiency

42


Main Cost Efficiency Projects & Initiatives (2/2)

Procurement synergies

Consolidating Group purchasing

volumes in Italy and leveraging

global BNP Paribas’ contracts/scale

Technology (hardware and

software, telecom, other systems)

Bank services (ATMs, mail,

payment systems)

Professional services

Information services

Financial Elements

Optimised functions

Efficiency improvement initiatives

IT: upgrading quality of information

systems and reducing

development activities, leveraging

on proven BNP Paribas’ platforms

Real estate: optimising

headquarter and international

network sites

43


Presentation Overview

Introduction

From Gruppo BNL to BNL bc

Restructuring Costs and Balance Sheet Adjustments

Details on Synergies

Conclusion


Financial Elements

Cost and and revenue synergies revised upwards

as as a result of of a comprehensive analytical work

Conclusion

Overall balance sheet and and restructuring costs confirmed

New New disclosure framework defined

45


BNP Paribas

Retail Banking in Italy

Stefano Calderano

Head of BNL Retail and Private Division

Rome, December 1 st 2006


Retail Banking in Italy

BNL

A nationwide recognised brand name

+

BNP PARIBAS

A European leader willing to

develop a new domestic market

A New Challenge

A new new success story on on the the Italian retail market

47


Customers

Sales points

People

Retail Banking in Italy

Retail & Private Division

2.6mn customers, of of which

2.5mn Individuals customers

112,000 Small Business customers

11,000 Private Banking clients

703 703 Branches

18 18 Private banking centres

(+ (+ 13 13 "Presidi")

1,270 ATMs

7,134 total resources, of of which 5,243 in in

direct customer contact roles

2,200 Individual customer RMs

400 400 Small Business managers

150 150 Private Bankers

48


1

2

Mortgage penetration 15% in Italy v.s. 40% European Average (EA)

Consumer Credit product penetration 5% v.s. 15% EA

Life insurance and pension funds penetration 25% v.s. 45% EA

Low level of customer satisfaction compared to European average

Service level as one of main driver of dissatisfaction

High potential for a player with European best practices

Retail Banking in Italy

Key Opportunities in the Italian Market (1/2)

Underdeveloped product segments

Sources: Bank of Italy, European Central Banks, BNL studies

Customer satisfaction as key driver for growth

49


3

4

A large Small Business market not always well served

5mn companies, €200bn of lending, high revenues per customer

Limited management skill for a number of them

Undifferentiated product offer, lack of specific focus, complex credit

process

Market focus on consolidation (Banca Intesa-Sanpaolo, BPVN-BPI,

BPU-BL, ...)

Retail Banking in Italy

Key Opportunities in the Italian Market (2/2)

A still fragmented market

High potential and and good timing

50


Retail Banking in Italy

A Client Centric Response

Know our clients better

Segmentation

Adapting to our clients’ expectations

Offering

Getting closer to our clients

Multi-channel Service model

Increase customer satisfaction

51


Presentation Overview

Segmentation: Know your Customer Better

Offering: Adapt to Client Expectations

A new Service Model: Getting Closer to our Clients

Already Started

Conclusion


Individual Customers

More Dedicated and Specialised Client Management

Current BNL model Target model

2.5 mn clients

13%

87%

Segments based only

on on financial wealth

Retail Banking in Italy

Managed by dedicated RM

Managed by pool of Account

Managers

Adapting to to client relationship needs

30%

70%

Segments based on on

financial wealth, age,

profession, potential,

product usage

53


All clients

below

€1.5mn

Retail Banking in Italy

Small Business

Adapt to Customers' Profile

Current BNL model Target model

No No segmentation

No No dedicated management

of of private side

300 300 clients/ RM RM

112,000 clients

Managed by dedicated RM

at Group level

Managed by dedicated RM

at branch level

Small

Corporate

Small Office

Home Office (e.g.

shop owners,artis.,

professionals

Better serve clients with with increasing needs

100 100 clients/ clients/ RM RM

Another RM RM for for

Private Private Side Side

250-300 clients/ RM RM

One single RM RM managing

both private and and

business sides

54


€1mn

financial

assets

Private Banking

Better Serve Existing Clients, Attract New Ones

Current BNL model Target model

11,000 Private

banking clients

Private

Retail

Client segmentation based on financial

resources

Limited differentiation

between Private and and Retail

offers

Retail Banking in Italy

€5mn

financial

assets

€0.5mn

financial

assets

Retail

Private

“Auto-segmented" clients

Segmentation based on on

financial assets and and upside

potential

Comprehensive offering

distinct from the the standard

Retail one one

Develop referrals with with Retail,

Small Business, Corporate and and CIB CIB

HNWI

Segmentation

with dedicated

service model

55


Presentation Overview

Segmentation: Know your Customer Better

Offering: Adapt to Client Expectations

A new Service Model: Getting Closer to our Clients

Already Started

Conclusion


Individuals

Specialised and Innovative Product Offering

Current accounts

Retail Banking in Italy

New New multichannel current account

New New product for for young customers

Revision Revision of of packaged accounts

Personal loans Adapt Adapt amount and and duration to to client profile

Mortgages

Extend Extend duration

Relaunch Relaunch variable rate rate fixed payment mortgage

Savings Revamped Revamped product offering

Full Full access to to leading edge Group product innovation

57


Fleet management

Leasing

Current Account

Credit

Other specific products

Retail Banking in Italy

Small Business

New Product Offering

New Company car car fleet management (Arval)

Leasing: Enhanced leasing process and and tools

(Locafit/ BNP Paribas Lease Group)

Modular Current Account: Increased customization

and and flexibility through tailor made banking and and

extra-banking services

Flexible/hybrid short term credit lines

Packaged medium term loans

Purchasing cards

Better serve client needs

58


Private Banking

Completely Renewed Service and Product Offering

Retail Banking in Italy

Global wealth management

Fiduciary services

Tax and legal counseling

Real estate and art advisory

International Private banking

Product Offering Service Offering

Investment products

Sicav / hedge funds

Structured products

Unit linked, Index

linked

Credit (leverage)

Client Relationship

Portfolio management

approaches

Discretionary

management

Advisory service/ fee

based

59


Presentation Overview

Segmentation: Know your Customer Better

Offering: Adapt to Client Expectations

A New Service Model: Getting Closer to our Clients

Already Started

Conclusion


Retail Banking in Italy

A More Effective and Accountable Structure

Current BNL Model

Retail & Private Division

Private Banking

Centers

18 +13

Mercati

Zone

12

64

Retail branches

703

Target Model

Retail & Private Division

Private Banking

Centers

18 + 13

Regions

Groups

Reinforced territorial responsibilities

5

31

Retail branches

703

61


Branch

Retail & Private

Division

Small

Business

relationship

managers

Mass

market

salespeople

Retail Banking in Italy

Refocused and Reintegrated Branch Model

Current BNL Model Target Model

Zone

Branch

Manager

Affluent

relationship

manager

Operations

Division

Head of

tellers

Tellers

Branch

Small Business

relationship

managers

Retail & Private

Division

Groups

Branch

Manager

Individuals

Segment A

Relat. Manag.

Tellers Reception

Strengthen the the role role of of Branch Manager

Develop an an integrated team team culture within within the the branch

Individuals

Segment B

Relat. Manag.

62


Services area

Retail Banking in Italy

A new Branch Layout to

Improve the Service to Clients

Advisor Offices

Reception

Entrance

Tellers

ATM area

250 existing branches to be renovated in 3 years

All new openings will be done according to new branch lay-out

All network to be restyled by 2009

63


Retail Banking in Italy

"Piano Sportelli" to

Generate Medium Term Organic Growth

Base expansion on geomarketing rationale

Focus on urban, high-end customers

Focus on areas with good BNL footprint

Deepen territorial coverage

100 new branches by 2009

Full income generation capacity from 2011

Limited start up costs

Fully posted by 2009

Cost/Income by 2011: 45%

Preparing a second wave of of

revenue growth

64


From From a bank bank with with multiple multiple forms forms

of of access… access…

ATM Internet

Telephone

reception

services

Branches

Interactive

Voice

Servers

Retail Banking in Italy

?

Get Closer to the Client Anytime :

the Integrated Multi-Channel System

Specialised

after-sales

services

Mobile

Phone

Call

centres

… to an integrated multi-channel

banking

Branch network

Internet

Customer

Relations Center

CRC

A virtuous circle

Profitability

Contact

+ Service = Sales

Loyalty

Satisfaction

Leveraging BNP Paribas know-how and skills

65


Presentation Overview

Segmentation: Know your Customer Better

Offering: Adapt to Client Expectations

A new Service Model: Getting Closer to our Clients

Already Started

Conclusion


Actions Already Undertaken and Quick Wins

Simplified sales contracts already delivered to the network

Marketing campaigns already launched

Intragroup referrals started

Commercial action plan for 2007 launched by mid December

Rebranding campaign about to start

Retail Banking in Italy

67


€400mn in in 1 month

Product

Index Linked Life Life Insurance

Placement period

19 19 August – 29 29 September 2006

Length

5 years

Retail Banking in Italy

First Achievements

Index Linked Life Insurance Unit Linked 4WD

€600mn in in 3 weeks instead

of of €450mn in in 8 weeks

Product

Guaranteed Unit Linked

Placement period

9 October – 12 12 December 2006

Underlying fund

Parworld Absolute Return 100 100

Guaranteed 2012

Length

6 years

Guarantee

100%

A promising success

evidencing strong staff commitment

68


Presentation Overview

Segmentation: Know your Customer Better

Offering: Adapt to Client Expectations

A new Service Model: Getting Closer to our Clients

Already Started

Conclusion


Retail Banking in Italy

Committed to Delivering the Synergies

Total 2009 BNL bc Retail & Private

Banking Division Synergies

in €mn

145

Gross Revenue

Synergies

-102

159

Marginal Costs Cost Synergies Total Synergies

90 90 projects aimed at at delivering

€202mn synergies

202

70


Offer a differentiated banking experience

to to our clients

Retail Banking in Italy

Conclusion

Intensive change management program

to to reshape the network and commercial set-up

Leverage on on BNP Paribas’ experience

and expertise

71


BNP Paribas

Asset Management and Services in Italy

Alain Papiasse

Head of Asset Management and Services

Isabella Fumagalli

Head of Cardif Italy

Rome, December 1 st 2006


Presentation Overview

AMS Overview

Strategy in Italy

Development Plan

Conclusion


A substantial part of the Group*

16% of revenues

15% of allocated capital

Wealth & Asset

Management

49%

A major presence in the asset gathering and management business

Assets under management €476bn +15% / 30.09.05

Assets under custody €3,430bn +19% / 30.09.05

Assets under administration €569bn +18% / 30.09.05

* Excluding BNP Paribas Capital and other activities

Asset Management and Services

A Major Asset for BNP Paribas

Revenues 9M06: €3.2bn

Real Estate

Services

Cortal 11%

Consors

8%

Private

Banking

17%

Asset

Management

13%

AMS

Insurance

30%

Securities

Services

21%

74


A high capacity to generate

revenues

Revenues

In €mn

2,616

3,044

3,552 +25.1%

2,565

Asset Management and Services

3,208

2003 2004 2005 9M06

AMS: a Fast Growing Platform

A strong inflow generation

Asset inflow rate*

4.6%

4.4%

9.9%

9.8%

2003 2004 2005 9M06

*Annualised rate as a % of AuM

A major major growth engine engine for for BNP BNP Paribas

75


Gather

Retail network

External distribution

Independent advisors

On-line distribution

Administrate

Custody and fund

administration

Employee savings plans

Property management

Asset Management and Services

Covering the Entire Investment Cycle

Manage

Advisory & discretionary

portfolio management

Sophisticated solutions

Real estate funds

Multi-management

Protect

Life insurance

Creditor insurance

Protection

Property & Casualty

76


#2 in mutual fund

promotion in France

Leader in multimanagement

in Europe

#1 in France

#3 in Western Europe

#7 in Asia and Latin

America

Leader in Real Estate

Services in Continental

Europe

#4 in life insurance

in France

#2 in creditor

insurance world-wide

#1 in Europe

#5 world-wide

Asset Management and Services

Businesses Leaders in their Markets

Global In Italy before BNL

Asset Management

Private Banking

Real Estate Services

Insurance

Securities Services

One of the foreign asset

manager leaders in external

distribution

One of the top foreign private

banks operating

in Italy

Recent acquisitions

by BNP Paribas

Leader in creditor insurance

for financial institutions

#3 in Italy

Top rated in Italy

(Global Custodian)

77


Presentation Overview

AMS Overview

Strategy in Italy

Development Plan

Conclusion


Asset Management and Services

Italy: Growing Asset Gathering Market

Large and attractive Asset Management market

Second retail market in Europe, getting more sophisticated

Institutionals are moving from conservative asset allocation to performance products

Lower life insurance penetration compared to other European countries

Positive impact on life insurance expected from future reforms on pensions

& retirement services and tax inheritance

Evolution of AuM

per investment type

553

CAGR

2002-2005

+23.9%

851

911

1,053

in €bn in €bn

2002 2003 2004 2005

Collective funds Retail – GPM & GPF

Life insurance Others

Life insurance

premiums

35.6

39.8

CAGR

1999-2005

+12.8%

46.3

55.3

62.8

65.6

73.5

1999 2000 2001 2002 2003 2004 2005

Sources : Assogestioni, ANIA

79


Asset

Management

BNL Gestioni

SGR

Asset Management and Services

The New Face of

Asset Management & Services in Italy

A significant contribution for the group

Assets under management: €60bn

Assets under custody: €346bn

A combination of production and distribution platforms:

BNP PAM

SGR

Insurance

BNL Vita

Centrovita

Cardif

Real Estate

BNL Fondi

Immobiliari

BNP Paribas

Dvpt. Mgt.

BNP Paribas

Property Mgt.

Atis Real

Enlarged Client base and coverage

Securities

Services

In house

BNP Paribas

Securities

Services

(BP2S)

Retail, Private, Corporates & Institutionals, Third party distribution

80


Asset gathering

life insurance,

mutual funds and

discretionary

management

Assets

under custody

BNL bonds

Current accounts

Asset Management and Services

BNL: Large Potential for Asset Gathering

BNL client assets

35%

20%

15%

30%

Source: BNL estimates as of 31 December 2005

Give access to BNL clients to

more sophisticated products

adapted to their needs and risk

return profile

Transform assets under

custody into asset gathering

Progressively transform BNL

bonds into asset gathering

demand

81


BNL’s Individuals market share per product

5.0%

Average

individual client

penetration

3.0%

Managed

Funds

Asset Management and Services

Greatest development

potential

1.0%

Life insurance

in unit-linked

Source : GFK Eurisco, Assogestioni, Assofin, ANIA, latest data available

4.1%

Life

insurance

Increase asset asset gathering market market share

share

Retail Clients

5.0%

Mortgages

82


Asset Management and Services

Retail Clients

Differentiated « asset gathering » offering for each client

segment

2.6mn current retail and private clients to be leveraged

New product range of mutual funds and discretionary

portfolio management

Rationalised range of funds for each client segment

Structured funds

Dynamised interaction between the network and the asset

gathering producers

Innovative range of life and creditor insurance products

Leverage on BNP Paribas Assurance expertise in France and

leading position world-wide on creditor insurance

Coordinated and best-in class offering: BNL Vita and Cardif

product range

83


Asset Management and Services

International Private Clients

BNP Paribas Private Bank expertise and products & services

offering to develop BNL Italian and international private client

franchise

WEALTH MANAGEMENT

Tax & Estate Planning

Fiduciary Services

Diversification

(real estate, property, art)

Life Insurance

INVESTMENT SERVICES INVESTMENT PRODUCTS

Discretionary Management

Active Advisory

Advisory Mandate

Execution

Money Market

Securities

Mutual Funds

Structured Products

& Derivatives

Alternative Investments

Credit

84


Asset Management and Services

Institutional and Corporate Clients

Leverage on BNL’s clientele to propose AMS’ enhanced

capabilities

Asset Management

Among BNL’s current 1,500 institutional clients, identify those

with potential to increase AuM

Among BNL’s 52,000 corporate and public administration

clients, select those with high potential

Securities Services

Custody, fund administration and other securities services for

BNL and external clients

Real Estate Services

Extended range of real estate services through BNP Paribas

Real Estate Services recent acquisitions in Italy and BNL

Fondi Immobiliari offers

85


Asset Management and Services

Third Party Distribution

Enhanced platforms to gain more external and third party

clients

Securities Services

Develop new client relationships and partnerships with BNL

institutional clients

Asset Management

Extended platform in Italy to propose a wider range of products

to existing and new partners

Provide BNL and third parties clients with fund management

and selection by the development of FundQuest Italy

Insurance

Through BNL Vita and Cardif, extended capabilities on

insurance to serve new clients and partners

A leading investment platform for for external

distribution and and partners

86


Presentation Overview

AMS Overview

Strategy in Italy

Development Plan

Conclusion


Development Plan

New Organisation to Coordinate Business Development

A new organisation in order to support the asset gathering

platforms and sales force vis a vis the client network

Marketing

Optimise workflows within

producers and distributors:

best-in-class asset

gathering offering

Asset Management and Services

AMS Italy

Sales Management

Promotion and training for

the network sale force in

order to achieve business

action plan

Economic Management

Budget and results

monitoring

Transform progressively BNL's asset base into asset gathering

products according with client risk profile

Optimise product range and create different offering for each client

segment

Develop training and support for the BNL network

Cross-sell with the AMS business lines in Italy and abroad

88


Asset Management and Services

Development Plan

Private Banking

Merged BNP Paribas Private Banking activities in Italy

with BNL

Extended best-in-class products to BNL Private Banking in

Italy based on BNP Paribas Private Bank expertise

BNL Private Banking entities merged with BNP Paribas in

Switzerland and in Luxembourg

89


Source : BNL, BCG

AuM distribution per asset classes

100% 100%

10.7%

12.0%

35.8%

17.8%

23.7%

Asset Management and Services

11.4%

7.7%

13.2%

25.1%

42.6%

BNL Gestioni Market

Boost the most profitable assets: equity, fixed income and alternative

Rationalised fund range (divided by 2)

Segmented discretionary mandate offering

Other

Balanced

Monetary

Equity

Development Plan

Asset Management

Fixed income

Enhanced network interactions & marketing and sales support

(retail and private banking) driven by AMS

Merged BNL Gestioni and BNP Paribas AM operations in Milan

90


Property

Development

Real Estate Asset

Management

Property

&

Facility

Transaction/

Advisory

BNL

Fondi

Immob.

Asset Management and Services

BNP Paribas

Dvlp. Mgt.

(2006)

BNP Paribas

Property Mgt.

(2006)

AtisReal

(2005)

Development Plan

Real Estate Services

Vertical integration of BNL

Fondi Immobiliari 2nd in Italy

with BNP Paribas Real

Estate Services’ Italian

entities

Insourcing of Property

development, facility

management, transactions to

leverage BNP Paribas recent

acquisitions in Italy

Valorisation of BNL non

strategic real estate

* Source: Assogestioni

91


Insourced BNL institutional custody & depositary bank

Insourced BNL Gestioni SGR fund administration

and transfer agent

Asset Management and Services

Development Plan

Securities Services

Strong Securities Services offering and service provider

for BNL institutional clients

Optimised BNL retail custody by using BNP Paribas Securities

Services global custody network

92


Swiss

Life Insurance penetration

(€ per capita)

UK

Ireland

Denmark

Belgium

France

Holland

Sweden

Italy

Norway

1,417

1,174

1,937

1,764

2,311

2,291

2,150

2,617

Sources: SIGMA, BNL Vita, Cardif, IAMA, 2004

Asset Management and Services

3,275

3,190

Share of premium

Development Plan

Life Insurance

Distribution of 2005 life-insurance products

6% 8% 19% 45% 96%

Revamped BNL Vita offering with optimised life insurance product range

unit-linked oriented

Enhanced network interactions / sales support

43%

51%

40%

52%

BNL Vita Market wo

Unicredit

Index linked

35%

46%

Whole

Market

Unit linked

23%

32%

4%

Cardif Italy Unicredit /

Aviva

General account

93


Creditor insurance GWP

9,000

8,000

7,000

6,000

5,000

4,000

Lower penetration of creditor

insurance

UK

France

Sources: Finaccord / Sigma, BNP Paribas Assurance, 2004

Asset Management and Services

Germany

3,000

2,000

1,000

0

Netherlands

Portugal

Belgium

Spain

Italy

0 20 40 60 80 100

Population (mn)

Development Plan

Creditor Insurance

Higher risk client perception (1 low – 10 high)

Critical illness

Death

Unemployment

Accidents

Accident family member

Unexpected spending

Divorce

Capitalise on Cardif unique expertise on credit protection insurance

Increasing market potential

Enlarged Cardif creditor insurance offering for BNL clients

Leverage BNL potential in “creditor insurance” on mortgages,

personal loans and credit cards

Development of individual protection offering

Italy

Sources: TNS Sofres - 2005

4.9

5.1

4.6

5.1

Europe

7.3

7.0

6.6

7.5

8.4

8.3

6.6

7.4

6.4

8.0

94


Presentation Overview

AMS Overview

Strategy in Italy

Development Plan

Conclusion


Strong Business Complementarities within AMS

Cardif

BNL Vita

Custody & Fund

administration

Life-insurance offering

BNP Paribas

Securities

Services

Revenue synergies: enhanced capability to to answer

more more sophisticated client client needs needs

Asset Management and Services

Fund administration

Global custody

Depository Bank

BNL SGR

Asset Management

Real estate investments

Depository Bank

Discretionary

management

Life-insurance offering

Multi-management

Fund offering

Real Estate

Services

BNL clients Third parties

Private

Banking

Real estate funds

96


Total 2009 AMS Synergies

in €mn

Gross Revenue

Synergies

Asset Management and Services

Committed to Delivering the Synergies

41

-18

Marginal Costs Cost Synergies Total Synergies

75 75 projects aimed at at delivering

€36mn synergies

13

36

97


Extended range of of investment’s products and and services

in in Italy Italy and and abroad, for for Italian clients

Diversified client base with with high potential

A second domestic market to to boost AMS

growth and and profitability

Asset Management and Services

Conclusion

98


BNP Paribas

International Retail Banking

and Financial Services (IRFS) in Italy

Pierre Mariani

Head of IRFS

Denis Delespaul

Head of Leasing Italy

Rome, December 1 st 2006


Presentation Overview

Strong Brands and Leadership Positions

BNL: a Unique Opportunity for IRFS

Creating a Leader in Italian Leasing

Conclusion


Retail Banking

in the

United States

#7 commercial

bank in the

Western US

742 branches

Retail Banking

in Emerging

Markets

Consumer

Finance

International Retail Banking and Financial Services

IRFS at a Glance

INTERNATIONAL RETAIL BANKING AND FINANCIAL SERVICES

52,000 employees in 56 countries

1,650 branches

in 32 territories

#1 in Continental

Europe

Private

Mortgage

#3 in France

among

specialist

players

Equipment

Solutions

#3 in Europe

#2 in Europe

101


Sustained Growth and Increased Profitability

IRFS Revenues & Operating Income

in €mn

Pre-Tax ROE

Pre-Tax Income

Revenues

Operating Income

3,074

818

25%

18%

3,597

1,015

4,174

1,219

4,870

1,503

4,903

International Retail Banking and Financial Services

1,629

5,013

1,801

5,980

2,036

5,417

1999 2000 2001 2002 2003 2004 2005 9M06

A growing contribution to to Group results

1,826

37%

23%

1999-2005

CAGR

+11%

+16%

Percentage of

Group Pre-tax

Income

102


Geographic split of IRFS 2005 Pre-Tax Profit

International activities (excluding France)

International Retail Banking and Financial Services

Italy

a Significant Market for IRFS

63% 70% 67% 71%

37% 30% 33% 29%

Consumer

Credit*

Private

Mortgage

Leasing Fleet

Management

Other

international

locations

Italy

Italy : : the largest international presence for Specialised

Financial Services prior to to the acquisition of of BNL

* Findomestic 50/50 JV with Cassa di Risparmio di Firenze

103


Consumer Finance*

Mortgages

Leasing

Fleet Management

Italy

Strong Brands and Leadership Positions

Start-up Employees Ranking Market Share

International Retail Banking and Financial Services

1984 >2,000 #1 12%

1989 250 #3 10%

1990 170 #1 14%

1995 560 #1 20%

Over 20 20 years of of success in in Italy

Before BNL Acquisition

Among specialist players

On small-ticket segment**

* 50/50 JV with Cassa di Risparmio di Firenze ** Leasing of equipment goods < €50,000

104


*

2005

Outstanding Loans

8,362

2,242

1,114

91,760

International Retail Banking and Financial Services

Italy

A Growth Driver for IRFS

2002-05

New Loans Growth

2005

Pre-Tax ROE

€mn CAGR, % %

vehicles

11.1

16.0

14.6 **

32.9

* Findomestic 50/50 JV with Cassa di Risparmio di Firenze ** Number of vehicles

31

42

41

67

105


Presentation Overview

Strong Brands and Leadership Positions

BNL: a Unique Opportunity for IRFS

Creating a Leader in Italian Leasing

Conclusion


Product factories

BNL

subsidiary

+

BNP Paribas

subsidiary

Combine IRFS’ Product Factories and

BNL’s Distribution Channel

Existing channels

(direct distribution/

partnerships/ etc.)

International Retail Banking and Financial Services

Distribution channels

IRFS subsidiaries’

clients

BNL Corporate clients

BNL Retail clients

A unique opportunity outside France to to combine

specialised financial services subsidiaries and and

a banking network

107


Leverage BNL’s client base

Distribute BNP Paribas’ products through BNL’s Corporate

and Retail distribution channels

Contribute to the development of BNL’s client base

Incentivise the cross-selling of BNL products to the clients

of IRFS’ Italian subsidiaries

Offer higher-quality services to BNL clients

Develop large-scale industrial projects

Combine operating platforms in specialised financial

services

Develop stronger integration of IRFS’ product factories and

BNL

International Retail Banking and Financial Services

Significant Benefits

Building on on experience of of partnerships between

product factories and and banking networks

Revenue

Synergies

Revenue

Synergies

Cost and

Revenue

Synergies

108


Examples

Arval: cross-selling to BNL customers

International Retail Banking and Financial Services

Leverage BNL’s Client Base

A unique opportunity for Arval to extend its market leadership by

growing in the attractive SME and mid-corp clients segments

BNL to refer Corporate and Small Business clients to Arval

Arval to set up a salesforce dedicated to BNL (relationship

managers and call-centre)

UCB International Buyers: mortgage loan offering for BNL

customers buying a house abroad

Dedicated process for BNL Affluent and Private Banking clients

buying a house abroad with a mortgage loan issued by UCB

Several high-potential projects being launched

109


Contribute to the Development of BNL’s Client Base

Examples

Banca UCB: contribute to BNL’s client acquisition effort

Discount on mortgage loan rate for Banca UCB new customers

opening a current account at BNL

Retail banking in Emerging Markets: strong growth in coverage

to boost ability to serve BNL clients abroad

Doubling of existing branches in the Mediterranean and Gulf

areas over the 2005-07 period to reach 650 branches by 2007

Italian relationship managers transferred to Emerging Markets

locations to serve and develop Italian clients

Initial focus on Tunisia and Turkey

Leverage on on our our experience and and international network

International Retail Banking and Financial Services

110


In progress

Develop Large-scale Industrial Projects

Leasing: merger of BNP Paribas Lease Group and Locafit to

create a leader in the Italian leasing market

Under assessment

Mortgage loans: migration of Banca UCB and BNL to common IT

platform

Consumer finance: co-operation opportunities between

Findomestic* and BNL in revolving cards, personal loans and

salary loans

Industrial projects offering significant

potential for for revenue and and efficiency gains

* 50/50 JV with Cassa di Risparmio di Firenze

International Retail Banking and Financial Services

111


Presentation Overview

Strong Brands and Leadership Positions

BNL: a Unique Opportunity for IRFS

Creating a Leader in Italian Leasing

Conclusion


BNP Paribas’ Leasing Activities in Italy

100% owned by BNP Paribas

Leader on small-ticket equipment leasing market

43.5% owned by BNP Paribas *

#9 player in Italian leasing market

Create a leader in in Italian leasing

* Jointly controlled with Cassa di Risparmio di Firenze (43.5%)

International Retail Banking and Financial Services

Scope of the Leasing integration project

100% owned by BNL

#6 player in Italian leasing market

100% owned by Locafit

Niche player focused on operating leasing of equipment and

medical goods for public administration clients

113


New Loans

Clients

Ranking

BPLG + Locafit

Already a Leader in the Italian Market

Nation-wide presence

Employees

+

International Retail Banking and Financial Services

€2.8bn (2006E)

80,000

#1 for small ticket leasing

#3 for equipment leasing

#6 for real-estate leasing

17 branches + agents

460

Pro-forma

114


Client

segments

Distribution

channels

Operations

Strong Complementarity and Unique Positioning

Focus on small-ticket

equipment leasing

Leader in Vendor and

Manufacturer channels

Industrial process and

platform allowing

efficient management of

the small ticket business

Focus on real-estate

and medium/big

ticket leasing

International Retail Banking and Financial Services

Strong banking (BNL)

and third-party channels

(brokers)

Know-how to manage

real estate / structured

business

+

A comprehensive and

complementary

offering

4 highly

complementary

distribution channels

Skills and expertise to

successfully develop

both real estate and

equipment leasing

115


Locafit

Sales

7

Work

Groups

HR

IT

Reporting


BPLG

Sales

4

Work

Groups

A Full Integration Process Underway

BPLG – Locafit

Integration Project Management Team

Risk

Management

4

Work

Groups

8

Work

Groups

A structured and disciplined approach

International Retail Banking and Financial Services

Operations Finance Organization

& IT

7

Work

Groups

3

Work

Groups

40 work groups in 8 areas

7 support platforms

Human

Resources

3

Work

Groups

Audit

4

Work

Groups

116


Revenue synergies

International Retail Banking and Financial Services

Significant Synergy Potential

Develop cross-selling to BNL clients by offering better service

to BNL clients and to the BNL network

Develop operational leasing of office equipment goods

Develop Vendor leasing by signing partnerships with BNL Corporate clients

Increase penetration of insurance products

Cost synergies

Gain efficiency by migrating Locafit activities on BNP Paribas Lease

Group’s European IT platform

Reduce costs by moving to common location

Reduce cost of central functions

Risk

Reduce cost of risk by implementing BNP Paribas expertise (scoring,

workout ... ) in Locafit

Numerous synergy opportunities

identified and and being implemented

117


Vendors

Revenue Synergy Example:

The New Organisation of Banking Channel

Commercial Organisation Key benefits

BPLG-Locafit

distribution channels

Manufacturers Brokers Banks

Creation of a dedicated division

Specialisation of the Locafit

sales-force and organisation in

two distinct, dedicated teams

BNL Corporate clients

BNL Small Business clients

International Retail Banking and Financial Services

BNL

Corporate

clients

BNL

SME

clients

Specialisation

Higher availability

Higher professionalism

Rationalisation

Higher efficiency

Higher profitability

Communication

Higher motivation

Better marketing support

118


Developing a Common Culture of Success

OUR VISION

•“Our ambition is to become a model

for our shareholder

for our customers

for our employees”

11

22

33

A leader

Market share - ROE

A reference

Quality of services - Ethics

A social model

Values – Company climate

International Retail Banking and Financial Services

11

22

33

OUR OBJECTIVES

•Ambition and balance

Top 3 in the market in terms

of volumes and profitability

Cost / income < 40%

Employee turn-over < 3%

119


Presentation Overview

Strong Brands and Leadership Positions

BNL: a Unique Opportunity for IRFS

Creating a Leader in Italian Leasing

Conclusion


Total 2009 IRFS Synergies

in €mn

Committed to Delivering the Synergies

31

Gross Revenue

Synergies

-11

International Retail Banking and Financial Services

Marginal Costs Cost Synergies Total Synergies

50 50 projects aimed at at delivering

€26mn synergies

6

26

121


International Retail Banking and Financial Services

Conclusion

A strong presence in in all all business lines in in Italy

Now combined with a nation-wide banking network

Accelerated growth and enhanced profitability

122


BNP Paribas

Leveraging the Corporate Franchise

Riccardo Lupi

Head of BNL Corporate Division

Rome, December 1 st 2006


Presentation Overview

Market Characteristics and Positioning

New Organisation and Segmentation

Enhanced Products and Services

Conclusion


Main Features of the Corporate Market (1/2)

Geographical

specificities

Concentration

Performance

Specialisation

A sizable and still traditional market

Leveraging the Corporate Franchise

Mainly exporting

to to the EU

Growing

importance

of of exports

to to BRIC*

countries

Mostly small

family owned

mid caps

Multi-banked

6 to to 8 banks/Co.

Large use use

of of plain vanilla

products

*Brazil, Russia, India and China

125


Main Features of the Corporate Market (2/2)

Revenues from plain vanilla

products are predominant

81% of total revenues vs. an EU

average of 55%

Margins and risk

Margins: 180bp average in Italy

Cost of risk: 66bp average (1) in Italy

Good risk return ratio

Leveraging the Corporate Franchise

Corporate Market

Total

Over €500mn

€1.5mn-€500mn

Below €1.5mn

4.3mn €1,390bn

5%


Mostly mono-bank clients, bank

selection via tender agreements

High recourse to the banking

system, mostly for treasury

services and asset & liability

management

On-going devolution to local

authorities for higher decisional

and financial autonomy (namely

on debt structure and cash

management)

Virtually no provisions

Leveraging the Corporate Franchise

Main Features of the

Public Administration Market

Public Administration Market

Central PA

Large local PA

Small local PA

10,000* €610bn

*Not including Religious agencies, Provident institution, Welfare, No-profit companies, Schools and Unions

Total

3%

95%

Number

of PA

2%

66%

27%

7%

Expenditure

source: BNL Research 2004 data

127


4.7%

33%

North West

4.6%

North East

5.4%

Center

10.1%

22%

13%

12%

Lazio and

Sardegna

Leveraging the Corporate Franchise

A Nationwide Coverage

Corporate Market Public Admin. Market

5.5%

7.0%

100%

Italy

South

20%

Distribution of total

market companies

turnover

BNL Corporate short

term loans mkt share

2.6% 15%

North West

1.5%

North East

2.1%

Center

17.2%

16%

8%

43%

Lazio and

Sardegna

A balanced presence throughout Italy Italy

9.6%

7.6%

100%

Italy

South

18%

Distribution of total PA

market direct deposit

Total BNL PA

deposits mkt share

128


Global strategy

Increase market share

Grow share of collections

North East & North West

Cash-management

Focus over prospects

Leverage on retail

expansion

Internationalisation

Offer for Districts

Religious organisations

Lazio – Sardegna

Diversify client base

(Service Public

Companies)

Consolidate position

in PA market

Leveraging the Corporate Franchise

Implement a Global Strategy

Adapted to Regional Requirements

Leverage integrated platform

of products and services

Relation bank for PA

Benchmark bank for

Corporates

Center

Diversify client base

Offer for Districts

Public and Private

Partnerships and

prospects for Public

Administration

South

Consolidate market

leaser positions in PA

with selected projects

Liability management

for PA

Treasury

129


Presentation Overview

Market Characteristics and Positioning

New Organisation and Segmentation

Enhanced Products and Services

Conclusion


Reorganise the Network to Empower the Regions

PA

market

PA PA centre centre

Current BNL Model

12 Aree Territoriali

18

Area Corporate

Corporate

centre centre

Corporate

market

Corporate

centre centre

Leveraging the Corporate Franchise

Territory

Corporate

& PA PA centre centre

Target Model

5 Regions

Corporate

& PA PA centre centre

Corporate

network

Region

Territory

Corporate

& PA PA centre centre

Territory

Enable regional growth strategies

* including coverage and product specialist

12

62

5

21

51

Corporate

& PA PA centre centre

Delegate higher

credit power to

the network for a

prompt answer to

clients

Increase

commercial sales

force by 123 FTE

over 608

resources *

131


Large

Corporate

New Segmentation Aimed to

Increase Service Level to Corporate Clients

Current BNL Model Target Model

Clienti

Senior

Clienti

Junior

CIB Coverage

Large

Corporate

1,900

Grandi

Relazioni

Clienti

Senior

Corporate clients with turnover from €1.5mn to €500mn

Leveraging the Corporate Franchise

850

35,000

Higher

complexity

clients

Clienti

Junior

Client needs BNL response

High quality of

service and products

Fast response

Occasional high

skills and tailored

products

Cross selling oriented

structure

Selected high skills

RMs

High local presence

and high local

delegation of power

New network of

external specialists

for specific complex

needs

132


New Segmentation Aimed to Increase

Service Level to Public Administration Clients*

Current BNL Model Target Model

CIB Coverage

Grandi

Relazioni

Clienti

Enti

Leveraging the Corporate Franchise

40

Clienti

Local

Client needs BNL response

* Religious agencies, Local agencies, Central agencies, Provident institution, Welfare, Foreign offices, Non profit

companies, Law courts, Military entities, Schools and Unions

330

16,000

High quality of

service and products

Rather similar to

medium and small

corporate needs

Cross selling

oriented structure

Selected high skills

RMs

PA Relationship

Managers included in

a common structure

with Corporate

Functional link

maintained with PA

management

133


Presentation Overview

Market Characteristics and Positioning

New Organisation and Segmentation

Enhanced Products and Services

Conclusion


Leveraging the Corporate Franchise

Enhanced Products and Services

Benefit from a worldwide network with a strong presence in

the Mediterranean

Expand cash management offer to best in class standards

Increase specialised financial services product range

Leverage on new specialist support

Become the the benchmark bank

for for Italian corporates

Confirm leadership position

for for Italian public administration

135


International presence*

(number of countries)

34

42

Leveraging the Corporate Franchise

Benefit from a Worldwide Network (1/2)

53

66

85

Intesa-SP Unicredit ABN Credit Ag. BNP

Paribas

The The largest international network

offered to to Italian customers

*Including Representative Offices;

Source: Company Reports, Analyst Presentations, Industrial Plans, Web Sites

136


Mediterranean Basin and Gulf

Region

448 branches as at 30.06.06,

and 200 more to be opened by

end of 2007

Far Eastern Europe

Over 1,000 branches in Ukraine

(UkrSibbank) by 2007

150 branches to be opened in

Russia within 4 years

Italian Italian Desks Desks being being opened in in

France, Turkey, Tunisia, Gulf Gulf Region

Leveraging the Corporate Franchise

Benefit from a Worldwide Network (2/2)

French Desks Desks being being opened in in Italy Italy

(Italian (Italian export export towards France: 12%) 12%)

* 2005. Source: elaboration from Osservatorio ecoonmico ministero commercio internazionale on ISTAT data.

137


BNP Paribas leading European

transactional service for large corporates*

with a penetration rate 14.2%

Leveraging the Corporate Franchise

Raise Cash Management Offer to

Best in Class Standards

56% of the international cash management request for proposals

received by BNP Paribas in 2006 included Italy

BNL cash management capabilities to be integrated within and

benefit from the global offer

Access to high technology products & services for large corporates

New Transalpina offer targeting Mid. Caps. to be launched early 2007

Cash management mandates already won including Italian service

offer

Roullier, Seb, CMA-CGM

Strongly improve BNL BNL Cash Management offer

* Turnover > €1bn

138


Factoring

Leasing

Car Fleet

Management

Add New Fleet Management Products to

Strong Factoring and Leasing Offer

Ifitalia #2

16% market share

BPLG - Locafit #3

in Equipment

Leasing – 10%

market share

Arval #1

20% market share

Leveraging the Corporate Franchise

Integrate into Corporate Division

Synergies with BNPP-Factor

Launch "Easy factoring" products

Deploy comprehensive product range

Leverage on highly complementary

distribution channels

Develop both real estate and equipment

leasing

Wider and and more competitive offer

now now available for for BNL BNL clients

Refer Corporate and Small Business clients

to Arval

Set up a sales force dedicated to BNL

Establish permanent interactions

139


Corporate

Division

Region Region

Specialists

Territory

Corporate

and PA center

Leveraging the Corporate Franchise

Deploy Specialist Support at Regional

and Local Level

Specialists

Specialists

Support within BNL bc - Corp. Division

Support Provided by SFS

Support located within CIB - BNL

Cash

Management

Fixed Income

Structured

Finance

Trade Centers

Regulated loans

Arval

BPLG-Locafit

Ifitalia

CIB Mid Cap

dedicated teams

Expertise and and Cross selling

at at the the heart of of the the organisation

New dedicated

support

Strengthen of

current support

New dedicated

support

New dedicated

support

Strengthen of

current support

New dedicated

team

140


Presentation Overview

Market Characteristics and Positioning

New organization and segmentation

Enhanced Products and Services

Conclusion


Evolution of

BNL bc Corporate Division has Already Started

New structure being implemented

Pilot project has started in the North East

Key Regional Managers and Relationship Managers already

identified

Special commercial initiatives launched

Cross border clients targeted for cash-management

Systematic target of companies with internationalization needs

Italian desks being opened

Italian Desks in France, Turkey, Tunisia and Gulf Region

Further openings planned in Russia, India, China, Poland ...

Leveraging the Corporate Franchise

142


Revenues per

Corporate Client

in €000

17.2

+19%

20.7

2006 2009

Leveraging the Corporate Franchise

Ambitious 2009 Targets

Revenues per Public

Administration Client

in €000

8.0

+11%

8.8

2006 2009

Significantly raise revenues per per client

143


Gross Revenue

Synergies

Leveraging the Corporate Franchise

Committed to Delivering the Synergies

Total 2009 BNL bc Corporate Division Synergies

in €mn

77

-17

Marginal Costs Cost Synergies Total Synergies

50 50 projects aimed at at delivering

€119mn synergies

59

119

144


Leveraging the Corporate Franchise

Fine tuned strategy

Unmatched offering

Act fast!

Conclusion

145


BNP Paribas

Corporate & Investment Banking

in Italy

Nicola D’Anselmo

Head of CIB Italy

Rome, December 1 st 2006


Presentation Overview

BNP Paribas CIB in Italy before BNL

New Perspectives for CIB

Implementing the Strategy

Conclusion


Equity Derivatives

Management of

market risks

Optimised investments

(capital / yield

protected)

Solutions for strategic

equity stakes

Fixed Income

Debt Capital Markets

Interest rates, foreign

exchange and credit

markets

Cash & derivatives

products

Corporate & Investment Banking in Italy

Full Product Range Offered in Italy

Coverage

Corporates

Coverage

Financial

Institutions

Corporate Finance

Mergers & Acquisitions

Equity Capital Markets

Energy Commodities

Export Project

Commodities finance

Export finance

Project finance

Asset finance (Aviation/

Shipping)

Trade services

Structured Finance

Loan syndication

Acquisition finance

Leveraged finance

Real Estate financing

Media & Telecom

financing

148


Corporates

80 core Italian

corporates

55 subsidiaries of

non Italian clients

Local Authorities

& Public Services

40 public bodies

Corporate & Investment Banking in Italy

CIB

Products

&

Services

Major Clients

Financial

Institutions

30 banking groups

10 insurance groups

Financial sponsors

All major international

and Italian financial

sponsors

149


Corporate & Investment Banking in Italy

Top Tier Player in

Corporate and Investment Banking

Large and well-established franchises in Corporate and

Investment banking in Italy

Over 100 front-line professionals delivering the full range of

BNP Paribas’ services

Capitalising on global franchises in Fixed Income, Equity

Derivatives and Specialised Financing

Leading positions in the Italian market

#1 bookrunner in 2005 financial sponsors driven deals (Leverage

Finance) (1)

Market leader in Italian securitisation since 1992: #1 bookrunner

in 10M06 for all asset classes (2)

Top 3 player in Corporate Acquisition Finance

Top 5 player in Project Finance

(1) Source: Loanware (2) Source: Bondware

150


Presentation Overview

BNP Paribas CIB in Italy before BNL

New Perspectives for CIB

Implementing the Strategy

Conclusion


Corporate & Investment Banking in Italy

Mission Statement

Successfully implement the global CIB business model

in all business lines

Sell CIB products and services to a broader base of CIB

and BNL bc clients

Become leader

in in Corporate & Investment Banking in in Italy Italy

152


Corporate & Investment Banking in Italy

Broadening the Customer Base

CIB products & services

Expanded CIB customer base New BNL bc customer segments

CIB coverage

All large corporates (sales >

€500mn) plus an extended list of

corporates in specialised sectors

(Energy & Commodities, Media &

Telecom, Shipping, Aviation, Real

Estate)

All Financial sponsors

110 Financial Institutions

40 Local Authorities

Corporate Division

Corporates with sales < €500mn

More than 500 Local Authorities

Retail & Private Division

703 branches and 18 Private

Banking Centres

2.6mn customers

153


Significant Cross Selling Opportunities with BNL bc

Common platform for structuring and marketing Fixed Income

products to Corporate Division clients

Dedicated Fixed Income desk for Local Authorities

Set-up of a specialised M&A team to serve small and mid-corporate

clients

Partnership with the Retail and Private network for the marketing of

Equity Derivative products

An An international Investment Banking platform

with with a Corporate and and Retail coverage:

a unique business model in in Italy Italy

Corporate & Investment Banking in Italy

154


Revenues in FRB from cross selling

between CIB and FRB (1)

(1) FRB: French Retail Banking

(100 reference in 2002)

9 Months

100

263

Corporate & Investment Banking in Italy

Leveraging on French Experience

425

538

439

512

2002 2003 2004 2005 9M06

A well well proven cross-selling track record

155


Presentation Overview

BNP Paribas CIB in Italy before BNL

New Perspectives for CIB

Implementing the Strategy

Conclusion


Functions

Taskforce

Back

offices

Taskforce

Corporate & Investment Banking in Italy

32 CIB Workgroups

Coverage Corporates (1)

Coverage FIG (1)

Fixed Income (6)

Structured Finance (5)

Corporate Finance (2)

EQD (4)

ECEP (7)

Correspondent Banking (1)

International CIB (5)

Integration Process

Corporate

Taskforce

IT

Taskforce

157


Reinforced coverage

teams to serve a broader

client base

Increased specialisation

to improve client focus

Offer first-class solutions

to corporate clients by

Coordinating Business

Lines

Cross selling with

Corporate Division

Leveraging on BNP

Paribas platform for

cross-border

transactions

Corporate & Investment Banking in Italy

Industry

coverage

Chemical

& Pharma

Media &

Conglomerate

Energy & State

Steel &

Construction

Food & Retail

Auto & Luxury

80 Clients

Corporate Coverage

Corporate Coverage

Territorial

coverage

Center area

North-west area

North-east area

120 Clients

40 Clients

Marketing & support

Credit team

Local

Authorities

& Public

Services

A more powerful platform to to

deliver value-added solutions to to clients

Subsidiaries

of non-Italian

clients

N. Europe, UK

& S. Africa

France, Russia

Germany,

Austria, Switz.

Benelux, Spain,

Portugal

North America

Far-East & USA,

Other

210 Clients

158


Expand number of of clients and and strengthen business

relationships through cross-selling

Corporate & Investment Banking in Italy

Financial Institutions Coverage

Consolidate our leading position with large financial

institutions

Develop sales with regional banking groups by leveraging

on BNL existing relationships

Enter the Italian Institutional Investors Market (banking

foundations, pension funds) with tailor-made solutions

159


Financial

Institutions

Large

Corporates

Local

Authorities

& Public

Services

Mid-

Corporates

Corporate & Investment Banking in Italy

Fixed Income

A dedicated sales team to to add BNP Paribas Fixed Income

expertise to to BNL strong existing relationships with mid and small

regional banks

Deploy BNP Paribas world-class expertise leveraging on on

BNL’s commercial relationships

Combine BNL approach of of very close client contacts through the

network with a group of of product specialists bringing BNPP

expertise in in derivatives and securitisation

Specific focus on on the largest organisations

Dedicated sales team (joint venture with Corporate Division)

BNL providing origination, sales and direct client interaction

through regional corporate sales teams

BNP Paribas providing expertise in in product structuring,

pricing, trading and risk management techniques

160


Leverage on BNL Italian franchise and BNP Paribas global

leadership in Equity Derivatives products

Develop sale

of of structured

products

through BNL

retail network

Launch a

covered

warrants &

certificate

activity

Further

penetrate the

Italian

institutional

investor market

Corporate & Investment Banking in Italy

Equity Derivatives

Develop Structured Products for for retail clients

Bring Bring innovation to to BNL clients

Insurance Insurance wrappers (index-linked, unit-linked), structured

notes, investment certificates

Develop Retail Listed Products offer through new

issues

Distribution Distribution through BNL retail network and and online platform,

external brokers and and institutional coverage

Propose global investment solutions to to Italian

institutional investors

Focus Focus on on entering new segments: pension funds (Casse

Previdenziali), non-profit organisations and and cooperatives

161


Corporate & Investment Banking in Italy

Structured Finance

The integration of two leaders complementing each other

A truly Pan-European

franchise with integrated

advisory and debt platforms,

leader in large sized

transactions on the Italian

market

A leading player in the Italian

market for mid-sized

structured deals with strong

origination capabilities

A leading force in the Italian leveraged loan market : 19 deals

in 2006 YTD with underwritten debt in excess of €2.1bn

Stronger combined position in Corporate Acquisition market

A powerful syndication desk in Italy

162


Corporate & Investment Banking in Italy

Energy Commodities Export Project

Energy and commodity derivatives present high potential

with BNL’s strong Mid. Cap. Italian client base

Shipping: combine BNL’s domestic client proximity with BNP

Paribas' specialised industry coverage approach

Example: BNP Paribas-BNL has just led a $450mn facility for

Navigazioni Montanari, the largest shipping transaction ever

arranged in the Italian market by an international shipping bank

Build on on ECEP’s leading market expertise to to offer high

value added products to to BNL BNL corporate customer base

163


Corporate & Investment Banking in Italy

Corporate Finance

A very attractive growth potential for Corporate Finance (CF)

Penetrate the large transaction segment of the market, i.e. deal

size over €1bn

New focus on small-mid caps for M&A and ECM transactions

Increase ECM market share to that of the other major Italian

banks

Key actions identified to extract growth potential

Expansion of CF Italy current platform to ensure full coverage of

CIB broader large cap customer base

Set-up of a team within CF Italy fully dedicated to small and mid

caps covered by the Corporate Division of BNL, to transform

pure lending relationships into CF relationships

BNP Paribas --BNL BNL to to become a local operator

in in the the Italian Corporate Finance business

164


Presentation Overview

BNP Paribas CIB in Italy before BNL

New Perspectives for CIB

Implementing the Strategy

Conclusion


Total 2009 CIB Synergies

in €mn

Negative

Revenue

Synergies

Gross Revenue

Synergies

Corporate & Investment Banking in Italy

Committed to Delivering the Synergies

-24

110

Marginal Costs Cost Synergies Total Synergies

90 90 projects aimed at at delivering

€96mn synergies

-23

33

96

166


Wide range of of cross selling opportunities

with with other divisions in in Italy Italy

Corporate & Investment Banking in Italy

Conclusion

A European leader with with a strong local presence : :

a unique combination in in Italy Italy

Become leader

in in Corporate & Investment Banking in in Italy Italy

167


BNP Paribas

Investor Day

Conclusion

Baudouin Prot

Chief Executive Officer

Rome, December 1 st 2006


CIB

26%

AMS

16%

BNP Paribas

Businesses

3Q06 revenue split

FRB

20%

IRFS

27%

Strong Strong retail retail banking base: base:

58% 58% of of revenues

BNP Paribas

A Well Balanced Business Mix

BNL bc

11%

Asia Pacific

6%

Middle East/Africa

4%

North

America

12%

Emerging

Europe

3%

Other Europe

16%

Geography

3Q06 revenue split

South

America

1%

Italy

14%

France

44%

Europe is is the the core core market:

77% 77% of of revenues

169


Individual

Customers

Retail Banking networks

BNP Paribas

BNP Paribas

An Integrated Business Model

Corporate

Customers

Financial

Institutions

France

Italy

Western United-States

Emerging Markets

Specialised Financial Services

Asset Management and Services

Corporate and Investment Banking

Centred on on client needs and cross selling

170


Revenues

In €bn

BNP Paribas

18.7

BNP Paribas

A Strong Revenue Generation Capability

+14.6%

+11.2%

at constant scope

and exchange rate

21.5

+28.7%

16.2

20.9

2004* 2005* 9m05* 9m06*

Robust organic growth

further further enhanced by by a selective acquisition policy policy

+15.4%

at constant scope

and exchange rate

* EU-IFRS standards, excluding BNP Paribas Capital

171


Cost/income

in %

BNP Paribas

64.2

Cost of Risk

in bp

62.7

65.2

62.9

BNP Paribas

Cost & Risk Discipline

61.6

61.2

Strong culture of of cost cost & risk risk management

59.4

2000 2001 2002 2003 2004 2005 9M06

41

45

51 50

30

18 16

2000 2001 2002 2003 2004 2005 9M06

172


0.66 0.71

0.42

in €

1.43

BNP Paribas

A Track Record of Growth and Value Creation

Net Earnings per Share Dividend per Share

2.58

2.79

2.16

4.70 4.64

4.31

3.78

5.55

7.02

93 94 95 96 97 98 99 00 01 02 03 04 05

Undiluted EPS based on the average

number of shares outstanding

Net Net earnings per per share share

+26.5% per per annum annum

(CAGR (CAGR 93-05) 93-05)

in €

1.13

1.20 1.20

0.88

0.75

0.53

0.41

0.23 0.24 0.27

1.45

2.00

93 94 95 96 97 98 99 00 01 02 03 04 05

Dividend per per share share +22.4%

per per annum annum

(CAGR (CAGR 93-05) 93-05)

2.60

173


The Integrated Business Model Applied to Italy

Full range of businesses deployed, with significant positions

Retail

banking

New organization (BNL bc / CIB / AMS / SFS/ functions)

BNP Paribas

Consumer

finance

Mortgage

Fleet

Mgt

BNP Paribas in 2005 Joint Venture 50%* External growth since 2005

Share know-how & state-of-the-art products

Foster cross-selling

Leasing

Leverage local expertise with Group best practices

CRM, Risk management, ALM…

* Findomestic 50/50 JV with Cassa di Risparmio di Firenze

Private

banking Insurance Asset Mgt Securities

Services

Real

Estate

CIB

174


BNP Paribas

BNP Paribas Competitive Advantages in Italy

Leading European positions in major product areas

(consumer credit, leasing, CIB…)

Proven commercial know-how distribution skills, relying on

cross-selling and incentivised sales forces

Strong brand policy, capitalising on BNL recognised franchise

and BNP Paribas European leadership

Worldwide presence, facilitating the international

development of Italian clients

Financial strength:

Tier One ratio at 7.8% by end 3Q06

Outstanding ratings: S&P = AA (positive outlook), Fitch = AA,

Moody’s = Aa2

175


BNL Group market shares

BNP Paribas Italy market shares

Individuals Corporate

12*

in % 2

1

5 5

1

4

1

2

in %

Consumer

credit

BNP Paribas

Mortgage

Network

Client

Penetration

Life

Insurance

Retail

Asset Mgt

Sources : Banca di Italia, Assogestioni, Assofin, ANIA, GfK

Eurisko. Latest data available.

A Solid Base from Which to

Increase our Market Shares

20

20

16

5

5

5 5

Fleet Mgt Factoring Leasing

Equipment

LBO Project

Corporate

Finance

Finance

Sources : Loanware, Bondware, Dealogic, Assifact, Assofin leasing

Latest data available

BNP BNP Paribas has has ample ample room room to to grow grow organically,

by by capitalising on on its its specialised businesses

* Findomestic 50/50 JV with Cassa di Risparmio di Firenze

4

2

176


BNP Paribas

Ingredients of an Italian Success Story in Place

Highly skilled top management, with complementary

background & experiences

Responsive organisation & clear action plans, giving more

power to the line managers

BNL staff motivated by the new challenge

Full BNP Paribas support: people and investments to

develop the franchise

Early Start, Strong Momentum

177


BNP Paribas

Creating Value from BNL

Synergies target (2009, pre-tax) revised upwards to €480mn

Cost: €270mn

Revenues: €210mn

A value-adding transaction

Reasonable price paid for BNL, given the synergies and the

subsequent transactions in the Italian market

EPS impact accretive as of 2008, even post restructuring costs

A new impulse for all our businesses

BNL banca commerciale

Asset Management and Services

International Retail Banking and Financial Services

Corporate and Investment Banking

French Retail Banking

178


BNP Paribas

BNP Paribas

a key player in Italy

Conclusion

179


BNP Paribas

Investor Day

Italy: Developing our Second Home Market

Baudouin Prot

Chief Executive Officer

Rome, December 1 st 2006


Appendix


1

2

BNL 9M06

Revenues

Costs

Gross Op. Income

Cost of risk

Operating Income

Net Pre-Tax

Strategy in Italy

P&L Reclassifications Explained

As published

in Italy

2,305

(1,599)

706

(485)

221

225

1

2

Group

contribution

incl 1Q06 proforma

2,233

(1,400)

833

(245)

(€99mn) transferred from costs to cost of risk corresponding to provisions for credit

related litigations

+€41mn provisions time value for money reducing cost of risk under Italian practices;

increasing revenues under BNP Paribas practices

3 -€112mn as contribution does not include the results on BNL’s AFS and trading

portfolios revalued on purchase accounting

(€108mn) one-off costs in BNL published accounts corresponding to BNP Paribas

4

balance sheet adjustments (depreciations, employee benefits)

5

4

5

588

579

(€378mn) one-off provisions in BNL published accounts corresponding to

BNP Paribas balance sheet adjustments

3

in €mn

Reclassifications

Purchase

Accounting

182

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