Centre Est Europe. Banque Fédérative du Crédit Mutuel. Consolidated Interim Report as at June 2006

Transcription

1 Crédit Mutuel Centre Est Europe Banque Fédérative du Crédit Mutuel Consolidated Interim Report as at June 2006

2 BFCM Comments on first-half 2006 activity and results BFCM activity on behalf of the CMCEE-CIC group Banque Fédérative du Crédit Mutuel (BFCM) acts as the holding company and the central refinancing unit for the CMCEE-CIC group. BFCM fulfils this role first on behalf of the retail networks of Crédit Mutuel CEE, Sud-Est, Ile-de- France and Savoie Mont-Blanc. Since the start of the year, BFCM resources from Crédit Mutuel banks ( 34.2 billion*) increased by 6.4%. At the same time, refinancing provided to fund the loans distributed by these networks rose by 14.3% to 38.3 billion*. These trends are a reflection of Crédit Mutuel s positive momentum in a market featuring sustained borrowing demand. Including CIC and the other subsidiaries for which BFCM also acts, deposits in the form of cash and interbank transactions from within the Group amounted to 51.3 billion* and refinancing provided came to 90.5 billion*. (* figures excluding accrued interest) BFCM and CIC market activities The in-depth restructuring of the market activities of Crédit Mutuel Centre Est Europe -CIC (CMCEE- CIC) continued in the first half of With CM-CIC Marchés, the Group acquired the means to raise the resources needed to refinance the growth of its activities and a dealing room capable of serving the needs of its different types of clients that include companies, local governments, large corporates and private banking and institutional clients seeking innovative capital markets products such as those developed for our own requirements. SALES ACTIVITIES With a 70-person sales force based in Paris and regionally to serve its domestic clients, the dealing room offers interest rate and currency hedging products and investment products, while staff based in Paris, Frankfurt and London serve the needs of clients elsewhere in Europe. Altogether our trading desks increased their sales in the first half of 2006 compared with the first half of 2005, in terms of both volumes and revenues. REFINANCING The treasury units responsible for the funding of the entire CMCEE-CIC group continued to seek to increase the diversity of financing resources, in terms of both markets and types of investor. At the end of the first half, the first transaction in the form of extendible notes was successfully launched on the US market for $3.5 billion. OWN ACCOUNT TRADING The results of own-account trading took a favourable turn in the first half in conjunction with numerous opportunities for favourable arbitrages made possible by trends in financial markets. This was true for fixed income markets as well as for equity markets, which saw a sharp increase in transactions of a financial nature. POST-MARKET FUNCTIONS Post-market functions are independent from operating activities. Back office and control teams have been adapted to the new configuration of front office activities, and it is expected that a new,

3 fully integrated front-to-back information system will be in place for the own-account activity by the end of 2006, and for all business lines by the end of CIC sub-group For the six months ended 30 June 2006, CIC s consolidated net profit before minority interests (under IFRS) amounted to 628 million, compared with 82 million for the first half of 2005, and virtually equalling the 635 million for the full-year This result is attributable mainly to all business lines positive momentum in their markets and the cost of risk being held to a low level. In the year from end-june 2005 to end-june 2006, the retail banking activity continued to grow, with the number of clients up by 4.8% to 3,715,450. Customer loans and advances increased by 15.7% and savings deposits by 6.5%. In insurance, the number of new non-life policies increased by 28%, while commissions rose by 20.8%. As a result, net banking income increased by 10.8% to 1,441 million for the first half of 2006 compared with 1,301 for the six months ended 30 June For the first half of 2006, net banking income generated by market activities amounted to 177 million compared with a loss of 405 million in the first half of 2005, which suffered from losses resulting from the disposal of risks on structured products. Factoring out this effect, the net banking income generated by market activities increased by 98 million during the first half of Moreover, net banking income from financing activities rose from 104 million for the first half of 2005 to 132 million for the first six months of As a result, net banking income at the financing and capital markets division amounted to 344 million for the first half of 2006, compared with a loss of 269 million for the first half of 2005 and income of 17 million for the full year. Private banking had net banking income of 209 million, an increase of 23.7%. Private equity activities generated net banking income of 138 million in the first half of 2006, compared with 58 million for the first half of 2005 and 247 million for the full year. Total net banking income for the CIC group amounted to 2,163 million for the first half of 2006, compared with 1,265 million for the same period in Operating expenses amounted to 1,309 million compared with 1,210 million for the six months to 30 June The expansion of CIC s retail banking network and the broadening of its range of services contributed to achieving these results. The accelerated growth of all business lines and the continued streamlining of systems, subsidiaries and all other components of the group enabled CIC and the Crédit Mutuel CIC group to improve their margins and strengthen their balance sheets. Insurance Consolidated revenues from the insurance activities of Groupe des Assurances du Crédit Mutuel (GACM) for the first half of 2006 amounted to 4,301 million, an increase of 17.4% compared with the first half of The life insurance activity grew at a sustained pace of 19.5% in the context of strong collections on policies using multiple underlyings, which continued to be primarily euro-denominated. The non-life activity grew by 9.9%, including 4% attributable to the fist-time consolidation of Mutuelle des Travailleurs de la Région Lyonnaise.

4 The trend in claims continued to be favourable despite an increase in the cost of personal injuries due to car accidents. Commitments to policyholders, consisting of technical provisions, were up by 7.3% to 49.7 billion. The insurance division s investments amounted to 53.2 billion. Overall, GACM (including Mutuelle Vie) generated a profit for the first half of 226 million, 21.1% more than for the same period in Given the above, the BFCM group s consolidated net profit (under IFRS) for the first half of 2006 came to 836 million (compared with 342 for the first half of 2005), for a group share of 729 million (compared with 288 million for the first half of 2005). The breakdown by BFCM division was as follows: Retail banking 256 million Insurance 187 million Financing and capital markets 174 million Private banking 69 million Private equity 118 million Structure and logistics 32 million Total assets (under IFRS) amounted to billion at 30 June 2006, 5.9% more than at 31 December The group share of shareholders equity was 7.2 billion.

5 FINANCIAL STATEMENTS BALANCE SHEET ASSETS Notes June 2006 December 2005 million euros Cash, central banks, post office accounts - assets Financial assets at fair value through profit or loss Derivative hedging instruments - assets Financial assets available for sale Loans and advances to credit institutions Customer loans and receivables Revaluation differences on portfolios hedged against interest rate risk Financial assets held to maturity Current tax assets Deferred tax assets Prepayments, accrued income and other assets, Investments in companies accounted for by the equity method Investment property Tangible fixed assets and finance leases - lessee Intangible fixed assets Goodwill Total assets

6 BALANCE SHEET LIABILITIES AND SHAREHOLDERS' EQUITY Notes June 2006 December 2006 millions euro Central banks, post office accounts - liabilities Financial liabilities at fair value through profit or loss Derivative hedging instruments - liabilities Amounts due to credit institutions Amounts due to customers Debt securities Revaluation differences on portfolios hedged against interest rate risk Current tax liabilities Deferred tax liabilities Accrued charges, deferred income and other liabilities Technical provisions on insurance contracts Provisions for risks and charges Subordinated debt Shareholders' equity Shareholders' equity - Group share Share capital Share premium Consolidated other reserves Unrealised or deferred gains or losses Net profit for the period Shareholders' equity - minority interests Total liabilities and shareholders' equity

7 Consolidated Profits&Losses accounts million d'euros Notes June June Interest receivable and similar income Interest payable and similar charges 30 (5 116) (5 484) Fees and commissions (income) Fees and commissions (charges) 31 (395) (352) Net profit on financial transactions* Net gains (losses) on portfolios at fair value through profit or loss Net gains (losses) on financial assets available for sale * including dividends from variable-yield securities Income and charges from other activities Net banking income (NBI) Staff costs 35 (860) (835) Other administrative charges 35b (570) (477) Depreciation and amortisation 36 (70) (78) Gross operating income Cost of risk 37 (60) (57) Operating profit Share in net profit of companies accounted for by the equity method Net gains (losses) on other assets Profit on ordinary activities before tax Income tax 39 (323) (116) Total profit Minority interests NET PROFIT net resuly by equity 40 28,01 11,06

8 Consolidated financial statements CASH FLOW STATEMENT in million of euros 6 months to 6 months to Full yea June 2006 June IFRS IFRS IFRS Net profit Corporation tax Profit on ordinary activities before tax /- Net charges to depreciation and amortisation of property, plant and equipment and intangible assets Impairment of goodwill and other non-current assets 0 +/- Net charges to provisions /- Share in profit of companies accounted for by the equity method /- Net loss (gain) from investing activities /- (Income)/charges from financing activities +/- Other movements = Total non-cash items included in profit on ordinary activities before tax and other adjustments /- Cash flows from interbank transactions (*) /- Cash flows from customer transactions (*) /- Cash flows from other transactions affecting financial assets and liabilities (*) /- Cash flows from other transactions affecting non-financial assets and liabilities Taxes paid = Net decrease (increase) in assets and liabilities from operating activities NET CASH FLOWS FROM OPERATING ACTIVITIES (A) /- Cash flows from financial assets and investments (*) /- Cash flows from investment properties (*) /- Cash flows from property, plant and equipment and intangible assets (*) NET CASH FLOWS FROM INVESTING ACTIVITIES (B) /- Cash provided by or to shareholders (*) /- Other net cash flows from financing activities (*) NET CASH FLOWS FROM FINANCING ACTIVITIES (C ) IMPACT OF EXCHANGE RATE MOVEMENTS ON CASH AND CASH EQUIVALENTS (D) Net increase (decrease) in cash and cash equivalents (A + B+ C + D) Net cash flows from operating activities (A) Net cash flows from investing activities (B) Net cash flows from financing activities ( C) Impact of exchange rate movements on cash and cash equivalents (D) Cash and cash equivalents - opening balance Banks, central banks and post office accounts (assets & liabilities) Interbank demand accounts and short-term loans/borrowings (assets & liabilities) Cash and cash equivalents - closing balance Banks, central banks and post office accounts (assets & liabilities) Interbank demand accounts and short-term loans/borrowings (assets & liabilities) CHANGE IN NET CASH

9 Notes to the financial statements The notes to the financial statements are presented in millions of euros. NOTE 1 - Accounting principles and methods Pursuant to European regulation no. 1606/2002 on the application of international accounting standards, the consolidated financial statements of the BFCM Group have been prepared in accordance with the IFRS (International Financial Reporting Standards) framework adopted by the European Union as at the date of their preparation. This framework comprises standards IAS 1 to 41 and IFRS 1 to 7 together with their interpretations adopted by the European Union. The accounting principles and methods are identical to those applied to the financial statements for the year ended 31 December Several amendments to existing standards came into force on 1 January 2006: - the update to IAS 39 and IFRS 4 on financial guarantees came into force. The latter specifies the accounting treatment of financial guarantees given by reference to IAS 39 "Financial instruments". This text has no impact on the financial statements as such agreements are treated in accordance with the provisions of the amendment, i.e. as financial instruments rather than as insurance contracts. - the limited revision to IAS 19 "Employee benefits". This revision introduces notably an option allowing for direct recognition in shareholders' equity of actuarial gains and losses on defined benefit plans. This option has not been used. This revision has no impact on the financial statements. - the limited revision to IAS21 "The effect of changes in foreign exchange rates". This text has no impact on the financial statements. The interim financial statements have been prepared in accordance with IAS 34 relating to interim financial information, which permits the publication of condensed financial statements. These statements are presented in accordance with CNC recommendation no R-03 of 27 October The interim financial statements complement the financial statements for the year ended 31 December 2005 published by the Group. The Group's activities are not seasonal or cyclical in nature. Estimates and assumptions were able to be made when measuring balance sheet items. The final estimates may differ from these initial estimates. NOTE 2 - Breakdown of balance sheet and profit and loss by activity and by geographic area The Group is organised around five main business lines: Retail banking covers the activities of the banking network and the specialised activities whose products are marketed through the branch network: finance leasing of goods and property, factoring, fund management, employee savings plans, and property. Insurance activities accounted for by the equity method are included under retail banking. Insurance activities Corporate and investment banking and capital markets covers: a) the financing of large corporate and institutional customers, specialised financing, international activities and activities carried out through foreign subsidiaries; b) market activities, comprising activities for the Group's own account and those carried out on behalf of customers. Private banking covers all companies whose main activity is private banking, both in France and elsewhere. Private equity activities and financial engineering. Administration and holding company covers all components that cannot be allocated to any of the other divisions (holding) and logistics structures. Consolidated entities are allocated in full to their principal activity based on their contribution to the consoldiated accounts. There are just two exceptions: CIC due to its presence in several activities and Cial for its market activities. In these cases, the company accounts are broken down analytically. The breakdown by geographic area is based on the geographic location of the consolidated entities. Breakdown of profit and loss by activity Six months to 30 June 2006 Retail Insurance Corporate and Private Private Administration and Total banking investment banking banking equity holding company Net banking income General operating expenses (1 079) (133) (136) (115) (13) (25) (1 501) Gross operating profit Cost of risk (58) (1) (1) (60) Gains on other assets* (1) Profit before tax Corporation tax (143) (76) (87) (24) (7) 14 (323) Net profit Six months to 30 June 2005 Retail Insurance Corporate and Private Private Administration and Total banking investment banking banking equity holding company Net banking income (102) General operating expenses (1 018) (125) (119) (104) (12) (13) (1 391) Gross operating profit (221) (6) 502 Cost of risk (54) (1) (1) (2) (58) Gains on other assets* Profit before tax (222) (3) 458 Corporation tax (108) (89) 76 (15) 6 14 (116) Net profit (146) * including net profit or loss of companies accounted for by the equity method and goodwill impairment

10 Comments on the six months ended 30 June 2005: 1) Corporate and investment banking: the net banking income of market activities includes a non-recurring loss on structured products of 484 million. 2) Private equity: portfolio securities of the private equity activity were recognised in the 30 June 2005 accounts as assets available for sale in the case of holdings of less than 20%. As such, only net gains realised on these securities were recognised in profit and loss. In the first accounts prepared under IFRS for the year ended 31 December 2005, the Group applied the fair value option to the entire private equity portfolio. Breakdown of assets and liabilities by geographic area ASSETS June Dec 2005 France Rest of Rest of Total France Rest of Rest of Total Europe world* Europe world* Cash in hand, balances with central banks and post office accounts - Asset Financial assets at fair value through profit or loss Derivative hedging instruments - Asset Financial assets available for sale Loans and advances to credit institutions Loans and advances to customers Financial assets held to maturity Holdings in companies accounted for by the equity method LIABILITIES June 2006 Dec 2005 Dec 2005 France Rest of Rest of Total France Rest of Rest of Total Europe world* Europe world* Central Banks, Post office accounts - Liability Financial liabilities at fair value through profit or loss Derivative hedging instruments - Liability Amounts due to credit institutions (3 194) (1 154) Amounts due to customers Debt securities * USA, Singapore and Tunisia Breakdown of profit and loss by geographic area Six months to June 2006 Six months June 2005 France Rest of Rest of Total France Rest of Rest of Total Europe world* Europe world* Net banking income General operating expenses (1 387) (95) (20) (1 502) (1 285) (88) (17) (1 390) Gross operating profit Cost of risk (54) (1) (4) (60) (64) 3 4 (57) Gains on other assets* Profit before tax Total net profit Net profit, Group share * USA, Singapore and Tunisia * including net profit or loss of companies accounted for by the equity method and goodwill impairment The breakdown by geographic area is based on the geographic location of the consolidated entities. NOTE 3 - Consolidation scope Changes in the consoldiation scope compared with 31 December 2005 were as follows: first-time consolidation of several entities holding various securities: Gestunion 3, Pargestion 3, Pargestion 4, Sofiholding 3, Ufigestion 3, Valimar 3 and Valimar 4. deconsolidation of CIC Information following its merger with Euro Information, EID following the reduction in our holding and CIC Production GIE due to it having become dormant. During the first half of 2006, BFCM also acquired a 49% stake in EBRA Est Bourgogne Rhône Alpes société ( anonyme simplifiée), whose registered office is located in Houdemont (Meurthe-et- Moselle) and whose purpose is to carry holdings in press companies. As the financial data of this company and of its subsidiaries are not material in relation to the Group's consolidated accounts, it is not consolidated. Company A. commercial banks June 2006 December 2005 Percentage Consolidation Percentage Consolidation Sub-group Control Interest method Control Interest method Bque de l'economie du Comm. et de la Monétique IG IG Banque du Crédit Mutuel Ile-de-France (BCMI) IG IG Crédit Industriel et Commercial (CIC) CIC IG IG Banque CIAL Suisse CIC IG IG

11 Banque de Luxembourg CIC IG IG Banque Pasche CIC IG IG Banque Pasche Monaco CIC IG IG Banque Régionale de l'ouest (BRO) CIC IG IG Banque Scalbert Dupont (BSD) CIC IG IG Banque Transatlantique CIC IG IG Banque Transatlantique Belgium CIC IG IG Banque Transatlantique Jersey CIC IG IG Banque de Tunisie CIC ME ME Bonnasse Lyonnaise de Banque (BLB) CIC IG IG Crédit Fécampois CIC IG IG Companies June 2006 December 2005 Percentage Consolidation Percentage Consolidation Sub-group Control Interest method Control Interest method Crédit Industriel d'alsace Lorraine (CIAL) CIC IG IG Crédit Industriel de Normandie (CIN) CIC IG IG Crédit Industriel de l'ouest (CIO) CIC IG IG Lyonnaise de Banque (LB) CIC IG IG Mutuel Bank Luxembourg CIC IG IG Société Bordelaise de CIC (SBCIC) CIC IG IG Société Nancéienne Varin Bernier (SNVB) CIC IG IG B.specialized credit institutions Sofemo IG IG Bail Ouest CIC IG IG CIAL Equipement CIC IG IG CIAL Finance CIC IG IG CM-CIC Bail (ex Bail Equipement) CIC IG IG CM-CIC Lease CIC IG IG Factocic CIC IG IG Laviolette Financement CIC IG IG SNVB Financements CIC IG IG Others Crédit Mutuel Cartes de Paiement - CMCP ME ME CM-CIC Asset Management IG IG Euro-Information ME ME Euro-Information Développement NC ME SCI La Tréflière ME ME Ventadour Investissement IG IG ACM GIE GACM IG IG ACM Services GACM IG IG SA Saint Germain GACM IG IG SCI Ads GACM IG IG Adepi CIC IG IG BLC gestion CIC IG IG CIC Capital Développement CIC IG IG CIC Epargne salariale CIC IG IG CIC Finance CIC IG IG CIC Information CIC FU IG CIC Lyonnaise de Participations CIC IG IG CIC Migrations CIC IG IG CIC Nord ouest gestion CIC IG IG CIC Participations CIC IG IG CIC Production GIE CIC NC IG CIC Régions Expansion CIC IG IG Cicor CIC IG IG Cicoval CIC IG IG Cigogne Fund CIC IG IG Cigogne Management CIC IG IG CM-CIC Securities CIC IG IG CM-CIC Mezzanine CIC IG IG Dubly-Douilhet CIC IG IG Efsa CIC IG IG Finances et Stratégies CIC IG IG Financière Ar men CIC IG IG Financière Voltaire CIC IG IG Gesteurop CIC IG IG Gestunion 2 CIC IG IG Gestunion 3 CIC IG - Imofinance CIC IG IG Impex Finance CIC IG IG Institut de Particip.de l'ouest (IPO) CIC IG IG Marsovalor CIC IG IG Pargestion 2 CIC IG IG Pargestion 3 CIC IG - Pargestion 4 CIC IG - Placinvest CIC IG IG Saint-Pierre SNC CIC IG IG SNVB Participations CIC IG IG Sofiholding 2 CIC IG IG Sofiholding 3 CIC IG -

12 Sofim CIC IG IG Sofinaction CIC IG IG Sud Est Gestion CIC IG IG Sudinnova CIC IG IG Transatlantique Finance CIC IG IG Ufigestion 2 CIC IG IG Ufigestion 3 CIC IG - Ugepar Service CIC IG IG Valimar 2 CIC IG IG Valimar 3 CIC IG - Companies June 2006 December 2005 Percentage Consolidation Percentage Consolidation Sub-group Control Interest method Control Interest method Crédit Industriel d'alsace Lorraine (CIAL) CIC IG IG Valimar 4 CIC IG - Vizille (banque de ) CIC IG IG Vizille Capital Finance CIC IG IG Vizille Capital Innovation CIC IG IG VTP 1 CIC IG IG VTP 5 CIC IG IG D. Insurance companies Groupe des Ass.Crédit Mutuel (GACM) GACM IG IG ACM IARD GACM IG IG ACM Nord IARD GACM ME ME Foncière ACM (ex ACM Retraite) GACM IG IG Astree GACM ME ME Atout Assurance GACM IG IG ACM Vie GACM IG IG Assurances du Sud GACM IG IG Euro Protection Services GACM IG IG ICM Life GACM IG IG ICM Ré GACM IG IG Immobilière ACM GACM IG IG Procourtage GACM IG IG Socapierre GACM IG IG Sérénis GACM IG IG Suravenir Assurances GACM ME ME Télévie GACM IG IG La Pérennité ME ME Consolidation method: FM = full method; EM = equity method; NC = not consolidated; MRG = merged

13 NOTES TO THE BALANCE SHEET - ASSETS NOTE 4 - Cash in hand, balances with central banks and post office accounts Loans and advances to credit institutions Cash in hand, balances with central banks and post office accounts Central banks of which mandatory reserves Cash in hand, post office accounts Total Loans and advances to credit institutions Ordinary accounts Loans Other receivables Securities not listed on an active market Repurchase agreements Receivables written down individually Loans to affiliates Provisions (13) (15) Total of which participating loans of which subordinated loans 8 9 NOTE 5 - Financial assets at fair value through profit or loss Financial assets at fair value by option through profit or loss Financial assets held for trading purposes Total NOTE 5a - Financial assets at fair value by option through profit or loss Securities Government securities Bonds and other fixed-income securities. Listed Not listed Shares and other variable-yield securities (1). Listed Not listed Other financial assets. Repurchase agreements Other loans and term accounts Total (1) Consists mainly of holdings carried in connection with the private equity activity. NOTE 5b - Financial assets held for trading purposes (1) Securities Government securities Bonds and other fixed-income securities. Listed Not listed 6 2 Shares and other variable-yield securities. Listed Not listed Trading derivatives Total (1) These are financial assets held in connection with market activities.

14 NOTE 5c - Derivatives June 2006 Dec 2005 Notional Asset Liability Notional Asset Liability Trading derivatives Interest rate instruments Swaps Other firm contracts Options and conditional instruments Foreign exchange instruments Swaps Other firm contracts Options and conditional instruments Other instruments Swaps Other firm contracts Options and conditional instruments Sub-total Hedging derivatives Fair Value Hedges Swaps Other firm contracts Options and conditional instruments Cash Flow Hedges Swaps Other firm contracts Options and conditional instruments Sub-total Total NOTE 6 - Derivative hedging instruments June 2006 Dec 2005 Asset Liability Asset Liability. Cash flow hedges of which change in value recorded in shareholders' equity of which change in value recorded in profit or loss. Fair value hedges Total NOTE 7 - Financial assets available for sale. Government securities Bonds and other fixed-income securities - Listed Not listed Shares and other variable-yield securities - Listed Not listed Long-term investments - Investments in associates Other long-term investments Investments in related undertakings Translation difference - Securities loaned 0 - Advances 0 of which securities given under resale agreements 0. Related receivables Total Of which investments in listed associates

15 NOTE 7a - Principal non-consolidated investments % held Shareholde rs' equity Total assets NBI or revenue Net profit Veolia < 5% Crédit logement < 5% Banca Popolare di Milano < 5% n/a 259 Investessor 49% n/a n/a Holding Eurocard 45% n/a n/a Groupe SFEJIC L'Alsace 78% CRH (Caisse de refinancement de l'habitat) 17% Ebra 49% 19 n/a n/a n/a The various figures (other than percentage held) concern NOTE 8 - Customer loans and receivables Performing receivables. Trade receivables Other customer receivables - home-related loans other loans and receivables including repurchase agreements Related receivables Securities not listed on an active market Receivables written down individually Impairment provisions on an individual basis (2 316) (2 398) Sub-total Finance leases (net investment). Equipment Property Receivables written down individually Impairment provisions on an individual basis (87) (82) Sub-total Reinsurance receivables 259 Advances to policyholders Total of which subordinated loans Finance leases with customers Opening balance AcquisitionsDisposals Other Closing balance Gross book value (194) (1) Impairment of uncollectable lease payments (82) (19) 14 0 (87) Net book value (180) (1) NOTE 9 - Revaluation differences on portfolios hedged against interest rate risk Description of assets and liabilities hedged and hedging instruments Asset Liability Asset Liability Change in fair value Fair value of interest rate risk by portfolio (90) NOTE 10 - Financial assets held to maturity Securities - Government securities Bonds and other fixed-income securities Related receivables Total - gross Impairment provisions (3) (3) Total - net

16 NOTE 10a - Movements in impairment provisions Dec 2005 Charges Write-backs Other June 2006 Loans and receivables due from credit institutions (15) (1) 1 1 (13) Customer loans and receivables (2 398) (371) (2 403) Securities available for sale (257) (6) 6 6 (251) Securities held to maturity (3) (3) Total (2 673) (378) (2 671) NOTE 11 - Current taxes Asset Liability NOTE 12 - Deferred taxes Asset (through profit or loss) Asset (through shareholders' equity) Liability (through profit or loss) Liability (through shareholders' equity) NOTE 13 - Prepayments, accrued income and other assets Prepayments and accrued income Securities collection accounts Currency adjustment accounts 2 74 Accrued income Sundry prepayments and accruals Sub-total Other assets Settlement accounts on securities transactions Other debtors Inventories and equivalents 0 0 Sundry (10) (9) Sub-total Other assets of insurance companies Total NOTE 14 - Investments in companies accounted for by the equity method Share in net profit of companies accounted for by the equity method June 2005 Percentage Percentage held Reserves Net profit held Reserves Net profit Banque de Tunisie Listed 20,00% ,00% 32 2 La Perennité Not listed 21,25% ,25% 14 1 CMCP Not listed 45,05% 4 45,05% 4 Euro Information Not listed 27,15% ,35% 37 3 EID Not listed 32,96% 15 Trefliere Not listed 46,09% 12 46,09% 11 Subsidiaries of the GACM sub-group Not listed 76,49% ,48% 35 3 Total Brut When the ACM group was included in the consolidation scope on 30 June 2002 using the equity method, goodwill was recognised. It is amortised based on net future cash flows as estimated on first consolidation. The opening value was 95 million and the closing value was 89 million. At 30 June 2006, the market value of the investment in Banque de Tunisie was 72 million. NOTE 15 - Investment property Opening balance Increase Decrease Other changes Closing balance Historical cost (1) Depreciation and impairment (81) (0) 0 1 (81) Net value 596 (0) (0)

17 NOTE 16 - Property, plant and equipment Opening balance Increase Decrease Other changes Closing balance Historical cost Land used in operations (0) 294 Buildings used in operations (26) Other property, plant and equipment (45) (237) 717 Total (71) (152) Depreciation and impairment Land used in operations Buildings used in operations (709) (39) 20 (63) (791) Other property, plant and equipment (644) (25) (472) Total (1 353) (64) (1 263) Net value (29) (40) Of which buildings rented under finance leases Land used in operations Buildings used in operations 49 (1) (0) 80 Total 94 (1) NOTE 17 - Intangible assets Opening balance Increase Decrease Other changes Closing balance Historical cost. Non-current assets generated internally. Non-current assets acquired (8) software other (8) Total (8) Amortisation and impairment. Non-current assets generated internally. Non-current assets acquired (76) (1) 7 (3) (72) - software (1) (0) (0) (1) - other (75) (1) 7 (3) (72) Total (76) (1) 7 (3) (72) Net value (1) (1) 114 NOTE 18 - Goodwill Opening balance Increase Decrease Other changes Closing balance Goodwill - gross (6) 870 Impairment (278) 2 (275) Goodwill - net (4) 594 NOTES TO THE BALANCE SHEET - LIABILITIES AND SHAREHOLDERS' EQUITY NOTE 19 - Central banks, post office accounts Amounts due to credit institutions Central banks, post office accounts Central banks 56 Post office accounts 0 0 Total 56 0 Amounts due to credit institutions Other ordinary accounts Borrowings Other liabilities Repurchase agreements Related liabilities Total

18 NOTE 20 - Financial liabilities at fair value through profit or loss Financial liabilities incurred for trading purposes Financial liabilities at fair value by option through profit or loss Total NOTE 20a - Financial liabilities incurred for trading purposes (1).Short sales of securities - Government securities 1 - Bonds and other fixed-income securities Shares and other variable-yield securities Debt securities given under resale agreements. Trading derivatives Other financial liabilities held for trading purposes Liabilities on borrowed securities Total (1) These are liabilities due in respect of market activities. NOTE 20b - Financial liabilities at fair value by option through profit or loss June 2006 Dec 2005 Book Amount due Difference value on maturity Book value.securities issued - Bonds - Certificates of deposit - Other, including interbank market securities Debt securities given under resale agreements Subordinated debt. Debt - interbank customers 1 1. Other liabilities under fair value option Total (686) NOTE 21 - Customer deposits. Special regulated savings deposits - on demand term Liabilities associated with savings deposits Sub-total Ordinary accounts Term accounts and borrowings Repurchase agreements Reinsurance liabilities 192. Related liabilities Sub-total Total NOTE 22 - Debt securities Certificates of deposit Interbank certificates & negotiable debt securities Bonds Related liabilities Total

19 NOTE 23 - Technical provisions on insurance contracts Life Non-life Unit-linked Other Total NOTE 24 - Accrued charges, deferred income and other liabilities Accrued charges and deferred income Blocked accounts on collection transactions Currency adjustment accounts Accrued charges Sundry accruals Sub-total Other liabilities Settlement accounts on securities transactions Payments to be made on securities Other creditors Sub-total Other liabilities of insurance companies Security deposits and guarantees received Other Sub-total Other liabilities of insurance companies Total NOTE 25 - Provisions for risks Opening balance Increases Reversals for the period (used) Reversals for the period (not used) Other changes Closing balance. Provisions for counterparty risk - on signature commitments (6) (15) (0) 89 - on financing and guarantee commitments 6 1 (1) (0) (0) 6 - provision for risk on sundry receivables 64 5 (1) (5) (2) 64 - other provisions for counterparty risk 7 7 (1) (0) (0) 13. Provisions for risks other than counterparty risks - provisions for retirement costs (8) (14) (2) provisions for disputes 22 0 (4) (0) provision for housing savings 92 (4) (17) (0) 71 - provision for taxation (1) (2) (4) 87 - other provisions for sundry eventualities (8) (14) (0) 75 - other provisions for risks and charges 0 0 (0) (0) 0 0 Total (35) (67) (9) 625

20 Note 25a - Retirement obligations and similar benefits Opening balance Increases Reversals Other changes Closing balance Obligations relating to defined benefit retirement plans and similar, excluding pension funds Retirement indemnities 52 4 (4) (2) 50 Top-up retirement benefits 52 1 (1) 52 Premiums linked to service awards (other long-term benefits) 34 0 (0) 0 34 Total booked (5) (2) 136 Top-up defined benefit retirement plans covered by the Group's retirement funds Obligations to employees and retired employees 40 (0) (0) 40 Total booked 40 (0) (0) 40 (The pension fund assets include 35,000 CIC shares) Obligations in respect of early retirement agreements Obligations 28 6 (17) (0) 17 Total booked 28 6 (17) (0) 17 The assumptions used for calculating retirement obligations and similar benefits include a discount rate equal to the long-term yield on government bonds as measured by the TEC 10 index. The differential between the discount rate and estimated rate of future salary increases is 1.1%, which is unchanged from that of the previous year and will be reviewed for the yearend closing. Employee retirement assumptions are revised each year for each country based on regulatory conditions. The AFB collective agreement for bank employees of 29 March 2005 was taken into account for this revision. The above obligations concern only the CIC group as Crédit Mutuel's obligations are outsourced. NOTE 26 - Subordinated debt Subordinated debt Equity loans Perpetual subordinated debt Other debt Related liabilities Total Principal subordinated debt issues at 30 June 2006 Type Date Amount Balance at Rate Maturity of issue issued end of period Banque Fédérative du Crédit Mutuel Redeemable 85m 85m 5,75% Banque Fédérative du Crédit Mutuel Redeemable 50m 50m 5,40% Banque Fédérative du Crédit Mutuel Redeemable 700m 700m 6,50% Banque Fédérative du Crédit Mutuel Redeemable 800m 800m 5,00% Banque Fédérative du Crédit Mutuel Super subordinated 1,600m 1,600m undetermined Banque de l'economie, du Commerce et de la Monétique Equity loan 166m 166m Banque de l'economie, du Commerce et de la Monétique Equity loan 166m 167m undetermined CIC Redeemable 300m 300m * CIC Redeemable $350m $350m CIC Equity loan m 137m ** *** CIC Perpetual m 191m **** * 3-month Euribor basis points ** Minimum 85% (average annual money market rate [TAM] + average annual bond rate [TMO])/2; Maximum 130% (TAM+TMO)/2 *** Non amortisable but redeemable at the borrower's request as from 28 May 1997 at 130% of the nominal amount revalued at 1.5% per annum for subsequent years **** Fixed rate of 6.60% to 2007, then 3-month Euribor % Banque Fédérative du Crédit Mutuel issues super subordinated securities in order to strengthen its financial structure and the level of prudential shareholders' equity of the banking group to which it belongs. The issue agreements provide for the payment of a coupon to the holder, which is payable regardless of BFCM's financial situation. Coupon payments can be suspended on in certain predetermined situations, but never at the issuer's discretion. Given (i) the contractual stipulations regarding the obligation to pay a coupon, and (ii) the absence of any room for manoeuvre on the part of BFCM alone as regards the suspension of a coupon payment, these super subordinated securities meet the definition of a financial liability, as described by IAS 32.

21 NOTE 27 - Capital and reserves. Capital Consolidated reserves - Regulated reserves Translation reserves (1) 18 - Other reserves of which issue premiums Retained earnings 1 (1) Total NOTE 28 - Unrealised or deferred gains or losses Unrealised or deferred gains or losses* on: - assets available for sale cash flow hedging derivatives Total * net of tax NOTE 29 - Commitments given and received Commitments given Financing commitments Commitments given to credit institutions Commitments given to customers Guarantee commitments Commitments given to credit institutions Commitments given to customers Commitments on securities Securities acquired under resale agreements Other commitments given Commitments received Financing commitments Commitments received from credit institutions Guarantee commitments Commitments received from credit institutions Commitments on securities Securities sold under repurchase agreements Other commitments received 1 448

22 NOTES TO THE PROFIT AND LOSS ACCOUNT NOTE 30 - Interest and similar income/charges June 2006 June 2005 Income Charges Income Charges. Credit institutions and central banks (2 331) (1 509). Customers (1 365) (1 284) - of which finance leases 950 (835) 939 (817). Financial assets/liabilities at fair value by option through profit or loss. Hedging derivatives 369 (397) (1 710). Financial assets available for sale Financial assets held to maturity 18 (1). Debt securities (974) (964). Subordinated debt (48) (18) Total (5 116) (5 485) NOTE 31 - Fees and commissions June 2006 June 2005 Income Charges Income Charges Credit institutions 6 (3) 4 (3) Customers 325 (4) 265 (4) Securities 368 (76) 291 (52) Derivative instruments 5 (6) 7 (16) Foreign exchange 15 (7) 10 (6) Loan commitments and guarantee obligations 3 (3) 3 (4) Services rendered 343 (295) 342 (267) Total (395) 922 (352) NOTE 32 - Net gains (losses) on financial instruments at fair value through profit or loss June 2006 June 2005 Trading instruments Instruments at fair value by option Ineffective portion of hedges 88 (39) Foreign exchange gain (loss) Total changes in fair value of which trading derivatives (1 028) NOTE 33 - Net gains (losses) on financial assets available for sale Dividends June 2006 June 2005 Gains/losses realised Impairment Total Dividends Gains/losses realised Impairment Total. Government securities, bonds and other fixed-income securities Shares and other variable-yield securities (1) 41. Long-term investments (2) Other Total (0) (1) 227

23 NOTE 34 - Income/charges from other activities June 2006 June 2005 Income from other activities. Insurance contracts: - net premiums (including reinsurance) - net reversals of technical provisions. Insurance contracts: Investment property. Other income Sub-total Charges on other activities. Insurance contracts (4 162) (3 631). Investment property (0). Other charges (17) (20) Sub-total (4 179) (3 652) Total other net income (charges) NOTE 35 - General operating expenses June 2006 June 2005 Staff costs (860) (834) Other charges (641) (557) Total (1 501) (1 391) NOTE 35a - Average number of staff June 2006 June 2005 Banking staff Management staff Total NOTE 35b - Other operating charges June 2006 June 2005 Taxes and duties (other than corporation tax) (65) (60) External services (522) (430) Amounts cross-charged Sundry charges (1) (1) Total (571) (478) NOTE 36 - Increases/recoveries of depreciation, amortisation and impairment of property, plant and equipment and intangible assets June 2006 June 2005 Depreciation and amortisation: - property, plant and equipment (64) (75) - intangible assets (2) (2) Impairment: - property, plant and equipment (0) (1) - intangible assets (4) (1) Total (70) (79) Intangible assets include notably leasehold rights. These rights are deemed to be open-ended and, as such, are not amortised. They are tested for impairment in the same manner as all other non-current assets.

24 NOTE 37 - Cost of risk Increases Recoveries Uncollectable receivables covered Uncollecta ble receivables not covered Collections of receivables previously written off Total 30 June 2005 Credit institutions (1) 1 (1) (0) 0 (1) 1 Customers. Finance leases (3) 5 (3) (3) 0 (4) (5). Other (349) 416 (109) (12) 8 (46) (64) Sub-total (353) 422 (112) (15) 9 (50) (68) Assets held to maturity Assets available for sale (4) 3 (1) (1) Other, including financing and guarantee commitments (40) 31 (9) 11 Total (396) 455 (112) (15) 9 (60) (58) NOTE 38 - Gains and losses on other assets To 30 June 2006 To 30 June 2005 Property, plant and equipment and intangible assets 4 3. Losses on disposals (2) (1). Gains on disposals 6 4 Gains (losses) on disposals of consolidated securities Total 4 3 NOTE 39 - Tax charge for the period June 2006 June 2005 Current taxes (296) (177) Deferred tax (charge) income (28) 61 Adjustments for prior years (0) Total (323) (116) The deferred tax rate is determined by the expected date of reversal. For the French entities, the deferred tax rate is 34.43% NOTE 40 - Earnings per share June 2006 June 2005 Net profit, Group share Number of shares at 1 January Number of shares at 30 June Weighted average number of shares Basic earnings per share (in euros) 28,01 11,06 Weighted average number of shares that could be issued 0 0 Diluted earnings per share (in euros) 28,01 11,06 NOTE 41 - Post-balance sheet events and other information There were no events between 30 June 2006 and the date the financial statements were prepared that would be likely to have a material impact on the financial statements.