Of the 1.7 billion euros increase 424 million euros was caused by the effects of the credit market turmoil in both the third and fourth quarter.

BancWest''s cost of risk rose to 218 million euros, while CIB''s cost of risk increased 206 million euros.

There were also lesser write-backs by CIB and from Cetelem''s higher provisions due to the increased outstandings in the emerging countries together with greater consumer lending risk levels in Spain.

Retail banking businesses in France and Italy remained stable and showed no signs of worsening.

In addition, return on equity was at 19.6%, a drop of 1.6% compared to 2006.

Segment Review

In the French Retail Banking division net income rose to 5.7 billion euros from 5.6 billion euros, while operating income and pretax income grew to 1.75 billion euros from 1.76 billion euros respectively.

Italian Retail Banking net banking income rose to 2.6 billion euros from 1.86 billion euros in the year ago period. Operating income in the unit increased to 566 million euros from 305 million euros. Pretax income advanced to 566 million euros from 295 million euros.

In International Retail Banking and Financial Services net income also grew to 7.95 billion euros from 7.3 billion euros. Pretax income in the unit rose to 2.2 billion euros from 2.5 billion euros a year earlier.

In addition, Asset Management Service pre-tax income was at 5.3 billion euros from 4.4 billion a year ago.

Emerging Markets

The company added 1.5 million new customers in 2007 in retail banking networks and opened 189 branches including Turkey, North Africa, and Russia. BNP aims to grow core business revenue share from the emerging markets to 10% in 2010 from 5% in 2007.