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Natexis Banques Populaires: Financial Highlights and Trends in 1H01

This report provides the financial highlights and trends of Natexis Banques Populaires in the first half of 2001. It includes key figures, activity by business line, risks and financial structure, and more.

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Natexis Banques Populaires: Financial Highlights and Trends in 1H01

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  1. Natexis Banques PopulairesFirst-half 2001

  2. Table of contents Banques Populaires Group: Financial highlights 2 Natexis Banques Populaires: Trends and 1H01 key figures 5 1H01 results 11 Activity by business line 17 Risks and financial structure 24 Natexis Banques Populaires share 30

  3. Banques Populaires Group:Financial highlights

  4. Change 1H01 1H00* Banques Populaires Group: Key figures (1) Consolidated income statement EUR mn • Net banking income 2,826 2,723 +4% • Operating expenses (1,824) (1,677) +9% • Gross operating income 1,002 1,047-4% • Cost of risk (198) (157) +27% • Gains / (losses) on fixed assets 52 17 • Income / (losses) of equity affiliates 6 8 • Current income before taxes 862 915 -6% • Exceptional items (48) (40) • Taxes (257) (310) -17% • Goodwill amortization 18 27 • Allocation to FGBR (66) (111) -41% • Minority interests (79) (40) +98% • Attributable net income 429 441 -3% * pro forma

  5. Dec. 31, 2000 June 30, 2001 1H01 2000 Banques Populaires Group: Key figures (2) Financial structure and profitability • Total regulatory capital (EUR mn) 12,301 11,816 • Tier one equity 8,904 8,346 • of which FGBR 1,619 1,553 • 2nd and 3rd tier ancillary capital 3,397 3,470 • Weighted assets (EUR bn) 118.8 115.8 • Tier one ratio 7.5% 7.2% • Risk coverage ratio 68% 69% • ROE 14.5% 14.1%

  6. Natexis Banques Populaires:Trends and 1H01 key figures

  7. Six months characterized by: • Sustained NBI growth • Total NBI : + 9%* to EUR 960 mn • Business sector NBI : + 8%* to EUR 935 mncompared with 1H00 which, on the whole, presented a very high reference base • Resistant overall profitability • Gross operating income : - 5%* to EUR 371 mn • Attributable net income : + 8%* to EUR 175 mn(on a comparable basis) • Determined expansion policy, particularly via organic growth • Average employees : + 12%* *1H01 / 1H00

  8. Financing Investment banking Services Other 1H99 2H99 1H00 2H00 1H01 • NBI (EUR mn)733 776 885 941 960 Steady progression in net banking income

  9. +28% -51% -1% +91% +3% +14% 1H00 1H01 Contribution to NBI by business line • EUR mn

  10. 175 164 162 125 110 Net income afterallocation to FGBR Allocation to FGBR Six-monthly net income • EUR mn

  11. 8.2 7.1 5.4 3.3 1H01 1H00 • Book value (per share) (2)EUR83 EUR 80 • ROE (3)11.2%13.6% (1) Calculated on the average number of shares outstanding (42,719,000 in 1H01) (2) Calculated on the number of shares outstanding at the end of the period (42,719,000 at June 30, 2001) (3) On an annualized and comparable basis EPS and profitability • Earnings per share (1)in EUR

  12. Natexis Banques Populaires:1H01 results

  13. 1H01 1H00 Change Consolidated income statement EUR mn • Net banking income 960 885 +9% • Operating expenses (589) (494) +19% • Gross operating income371 391 -5% • Cost of risk (86) (55) +56% • Gains / (losses) on fixed assets 3 (8) • Income / (losses) of equity affiliates 8 12 -34% • Current income before taxes 296 340 -13% • Exceptional items (2) (21) -88% • Taxes (77) (105) -26% • Goodwill amortization (10) (1) • Allocation to FGBR 0 (46) • Minority interests (31) (51) -40% • Attributable net income 175 116 +51%

  14. Investment banking24% Investment banking 28% EUR229 mn EUR 78 mn Services21% EUR 60 mn EUR284 mn EUR422 mn EUR146 mn Financing45% Services31% Financing 51% Contribution by business sector NBI Current income

  15. 1H01 1H00 Change Operating expenses and personnel • Employees (Full-time equivalent): • at June 30,2001: 7,487  (average, 1H01: 7,300) • at June 30,2000: 6,720  (average, 1H00: 6,493) EUR mn • Operating expenses 589 494 +19% • Personnel expenses 317 275 +15% • Other expenses and amortization 272 219 +24% • Cost / Income ratio 61.3% 55.8% +5.5 pts

  16. +11.3% 6.9 Specialized financing 6.2 +4.1% 40.4 38.8 Corporate loanoutstandings Corporate andinternationalbanking +10.3% 19.2 Other * 17.4 +6.6% 66.5 62.4 1H00 1H01 Loan outstandings Corporate client, average on the period • EUR bn * Financing of assets and acquisitions; commodity financing; trade finance

  17. Employee savings schemes 16% Private client asset management 4% International privatebanking 2% Mutual fundmanagement 53% Real estate assetmanagement 1% Insurance 24% Assets under management • Total assets under management: EUR 69.6 bn EUR at June 30,2001,EUR 1.3 bn increase over December 31, 2000 (of which 2.5 bn in new money and -1.2 bn of valuation effect)

  18. Natexis Banques Populaires:Activity by business line

  19. Corporate and international banking Sector: Financing NBI 1H01 = EUR 335 mn (+28%*) • Strong NBI growth: • Sustained expansion in value-added transactions(acquisition financing, real estate, financial engineering, syndications, LBOs) • Strong growth in payments and services activities (cash management) • Moderate growth in outstandings: • Average outstandings: EUR 59.7 bn(+6%* and +4.5%* at constant exchange rates) • Weighted outstandings at June 30, 2001: EUR38.4 bn (+4%*) • Further productivity improvement: • Cost / income ratio at 48%, versus 53% at 1H00 * 1H01 / 1H00

  20. Specialized financing Sector : Financing NBI 1H01 = EUR 87 mn (+ 14%*) • Factoring • Strong NBI growth (+ 31.2%* to EUR 49.9 mn): • Sharp increase in factoring and financing fees, but under increased competition • 28%* increase in factoring revenues • Average outstandings: EUR 1.8 billion • Lease financing (real estate and equipment) • Slight advance in outstandings (average outstandings: EUR 5.1 bn) • New business: + 11%* • NBI down slightly (- 1%*) • Business line cost / income ratio: 46.4% * 1H01 / 1H00

  21. Capital markets Sector : Investment banking NBI 1H01 = EUR 146 mn (1) • Capital markets • Strong increase in contribution of treasury and interestrate derivatives • Strenghtened commercial positions on the primary bond market(NBI + 30%) • Fine foreign exchange performance(3rd place on EUR/USD on the French market) • Brokerage and market origination • Reduction in NBI due to very difficult equity market conditions • Good performance by ABM Corp. (1) To compare with EUR 77 mn at 1H00, after exceptional provision of EUR 76 mn

  22. 1H01 1H00 Private equity Sector : Investment banking NBI 1H01 = EUR 83 mn EUR mn • Own funds • Investments59 95 • Disposals at sale price 123 201 • Net assets in portfolio (at June 30) 600 550 • Capital under management • Investments87 77 • Disposals at sale price 64 102 • Managed equity (at June 30) 980 810 • Total managed equity1,580 1,360(net assets in portfolio + managed equity in funds) • 1H00 base exceptionally high • Strong decrease in capital gains, though with maintained high deal flow

  23. Banking, financialand technology services Sector : Services NBI 1H01 = EUR 135 mn (+ 3%*) • Banking services: increase in volumes • Drop in the number of checks processed • Strong growth in card transactions (+ 35%*)and Interbank Teleclearing System (ITS) transactions (+ 29%*) • Global custody: satisfactory advance • Number of portfolios: 2.69 million (+ 14%*) • Assets under custody : EUR 309 bn (+ 9%*) • Xeod Services • Decrease in NBI (- 28%*) • General reduction in the number of orders executed(very rare large market placements) • Line Bourse • Number of accounts at June 30, 2001: 23,000 • Expansion • Acquisition of 34% of OFIVM (OFIVALMO Group) * 1H01 / 1H00

  24. Asset management and insurance Sector : Services NBI 1H01 = EUR 149 mn (- 1%*) • 7.4%* advance in assets under management to EUR 69.6 bn • Collective asset management growth (NBI + 12%*)thanks in particular to money market funds, but decrease in private banking • Employee savings schemes: Interépargne strengthens its position as leader in France (market share: 19.1%) • Number of accounts: 1.79 million (+ 0.25 million **) • Number of corporate: 9,183 (+ 429 **) • Insurance: • 3%** increase in assets and 15%** in number of contracts • Weak market conditions compared with 1H00 • Creation of Asset Square (fund broker for professionals) * 1H01 / 1H00 * *During 1H01

  25. Natexis Banques Populaires:Risks and financial structure

  26. June 30,2001 Dec. 31,2000 Risk coverage EUR mn • Doubtful loan outstandings 1,557 1,578 • Specific provisions 893 927 • Coverage ratio 57% 59% (specific provisions / doubtful loan outstandings) • Doubtful loan outstandings /total loan outstandings 2.7% 2.9% • Sectorial and geographical provisions 454 407 • Fund for General Banking Risks (FGBR) 263 263 • (Sectorial and geographical provisions 1.3% 1.2%+ FGBR) / weighted assets

  27. 9.3% Services 8.5% Energy 7.4% Aeronautics, armaments, electronics Mechanical and electronical construction 7.2% 7.0% Holding companies and conglomerates 5.8% Finance, insurance 5.6% Distribution, commerce Food sector 5.5% 5.2% Real-estate 5.2% Primary industrial 5.1% Audiovisuals, printing, movie business, advertising Building industry 4.8% International commodity trading 4.0% (2) 3.8% Telecom Administration 3.4% Pharmaceuticals, healthcare 3.4% Consumer goods 2.9% 2.9% Utilities Tourism, hotel trade, leisure 1.6% Miscellaneous 1.3% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% Credit risk: breakdown by economic sector Corporate and international banking activities portfolio (1) (1) EUR 56.1 bn (on and off-balance sheet) (2) Telecom: Industry = 2%, Services = 1.8%

  28. Asia and Oceania 3.4% France 70.9% Africa/Middle East 1.8% Latin America 2.5% North America 10.7% Other European Countries 3.0% European Economic Area Countries 7.7% Credit risk: breakdown by geographic area Corporate portfolio (1) (1) EUR 62.9 bn (on and off-balance sheet)

  29. June 30,2001 Dec. 31,2000 Weighted risks • Credit risks 52.0 49.7 • Corporate and international banking 38.4 36.5 • Specialized financing 4.7 4.2 • Other 8.9 5.1 • Capital market risks 4.6 4.4 • Total weighted risks 56.6 54.1 EUR bn

  30. June 30, 2001 Dec. 31,2000 Equity • Total regulatory capital 5,775 5,528 • Tier one equity 4,051 3,875 • of which FGBR 263 263 • of which preferred shares539 496 • 2nd and 3rd tier ancillary capital 1,724 1,653 EUR mn • Weighted assets 56,625 54,134 • Tier one ratio 7.2% 7.2%

  31. Natexis Banques Populaires Share

  32. 150.00 Natexis Banques Populaires 140.00 SBF Banks 130.00 120.00 Base 100 at 07/03/00 110.00 100.00 90.00 80.00 07/03/00 08/03/00 09/03/00 10/03/00 11/03/00 12/03/00 01/03/01 02/03/01 03/03/01 04/03/01 05/03/01 06/03/01 07/03/01 08/03/01 09/03/01 Share price Source : Datastream

  33. Share ownership • June-July 2001: Expansion of Employee Stock Ownership (ESOP) • Successful share issue reserved for Banques PopulairesGroup personnel: one employee out of two suscribed • EUR 102 mn capital increase • Share ownership* • Banque Fédérale des Banques Populaires 52% • Banques Populaires regional banks 25% • General public 23% among which: Employees (ESOP) 4.8% * as of 09.19.01

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