SOURCE: CREDIT AGRICOLE SA

March 07, 2007 01:41 ET

CREDIT AGRICOLE SA : annual results 2006

PARIS -- (MARKET WIRE) -- March 7, 2007 -- Very strong earnings growth

Full year 2006

- Gross operating income EUR 5,832 million (+28.8%)

- Net income (Group share) EUR 4,920 million (+26.4%)

- Cost/income ratio 64.0% (-2.9 points)

- ROE 17.0% (+1.2 point)

- Net earnings per share EUR 3.29* (+24.8%)

- Proposed dividend EUR 1.15 per share (+24.3%)*

Fourth-quarter 2006 results

(Change 4th quarter 2006/ 4th quarter 2005)

- Gross operating income EUR 1,362 million (+12.7%)

- Net income (Group share) EUR 1,105 million (+9.8%)

*adjusted figures linked to January 2007 capital increase

Crédit Agricole S.A.'s board of directors, chaired by René Carron, met on 6 March 2007 to approve the results for the fourth quarter of 2006 and the 2006 financial year.

Full-year net income (Group share) was EUR 4,920 million, up 26.4% on 2005. The operating environment was broadly positive, leading to strong growth in all of the Group's business lines. The Group also became much more operationally effective, with gross operating income rising by 28.8% and the cost/income ratio improving further, by almost 3 points. Return on equity rose significantly, from 15.8% in 2005 to 17.0% in 2006.

In 2006, the Group continued investing, in order to generate solid organic growth: major initiatives were undertaken to support the two French retail banks' commercial programmes. The two banks also started sharing production resources, aimed at enhancing productivity. Specialist business lines enhanced their product ranges: corporate and investment banking continued its development strategy, based on a comprehensive offering, an extensive international network and a progressive and steady investment strategy.

At the same time, sources of growth outside France were strengthened. Expansion outside France accelerated in 2006, with targeted acquisitions in high-potential eurozone countries. These reflected the sector and geographical priorities set out in the Development Plan announced in late 2005. Of the projected EUR 5 billion investment between 2006 and 2008, EUR 4.4 billion was spent in 2006 on:

- the purchase of a 72% stake in Greece's Emporiki Bank S.A. via a public offer, representing a major step forward in the Group's international development,

- the creation of FAFS, a 50/50 joint venture with the Fiat group in consumer credit,

- the move to take majority control of Espirito Santo Financial Group's life and property/casualty bancassurance subsidiaries and to increase its stake in Banco Espirito Santo in Portugal (from 22.5% to 23.8%),

- the acquisition of Index Bank in Ukraine, Meridian Bank in Serbia and Egyptian American Bank in Egypt.

This rapid transformation and international expansion resulted in an improved balance of revenues, with the international business accounting for 42% of the total as opposed to 35% previously. Together with strategic development in Italy that came into effect in early 2007 with the purchase of more than 660 Intesa branches, the Group is well on its way to generating 50% of its net banking income outside France, in line with the aims of the 2006-2008 development plan.

*

* *

At the Annual General Meeting on 23 May 2007, the board of directors will propose a dividend of EUR 1.15 per share. This represents a 24.3% increase on the dividend paid for 2005. Taking into account the new shares created in the capital increase in early 2007, the total dividend payout will increase by almost 35%, leading to a pay-out ratio of more than 38%.

The board of directors has decided to look at proposals for a capital increase reserved for employees, which should take place in the second half of 2007 and raise up to EUR 500 million.

*

* *

After the Board Meeting, chief executive officer Georges Pauget noted "the quality and momentum of these results". He added: "all organic growth drivers are working well. There is renewed commercial activity in all business lines, and innovation is on the increase. The investments we made in 2006 have given us solid new sources of growth, and have bolstered our balanced, diversified and high-potential growth model."

René Carron, chairman, commented: "These excellent results demonstrate the wisdom of the Group's strategic decisions. Crédit Agricole S.A. has rapidly implemented the main aspects of its 2006-2008 development plan. 2006 was a year of expansion, allowing us to achieved most of the plan's targets in its first year."

CRÉDIT AGRICOLE S.A. CONSOLIDATED RESULTS

Net income (Group share) came to EUR 4,920 million in 2006, an increase of 26.4% compared with 2005.

This performance, which was achieved in a generally healthy business climate, reflects robust growth in all business lines. The Group also became much more operationally effective, with gross operating income rising by 28.8% and the cost/income ratio improving further, by almost 3 points. Return on equity rose significantly, to 17%.

Very strong growth in gross operating income up 28.8% (and 24.2% at constant scope and exchange rates) was due to the following factors:

- Net banking income rose sharply (+18.2%) to EUR 16,187 million. At constant scope and exchange rates, the advance was 13.9%, reflecting strong organic growth, particularly in corporate and investment banking, asset management, private banking and insurance. Growth also benefited from the first impact of the international acquisitions.

- There was tight control of operating expenses against the backdrop of significant expansion and continued investment. Operating expenses totalled EUR 10,355 million, up 13.0% or 8.8% at constant scope and exchange rates.

Consequently, the cost/income ratio improved sharply, falling by 3 percentage points to 64.0%.

Risk-related costs remained low, down 4.8% at EUR 612 million, due to the ongoing positive operating environment.

The contribution from equity affiliates rose by 12.1% to EUR 1,671 million. Income from the Regional Banks (EUR 848 million) accounted for more than half of this figure. Other major contributors were Banca Intesa (+11.2%), Al Bank Al Saudi Al Fransi (+32.3%) and Eurazeo (x3).

The tax charge rose by 68.8% to EUR 1,590 million, reflecting a more normal effective tax rate of 30.0%. After tax and minority interests (EUR 399.0 million), net income (Group share) was EUR 4,920 million, up 26.4% relative to 2005.

ROE was 17.0%, versus 15.8% in 2005.

Fourth-quarter performance benefited from continuing strong commercial activity, along with the consolidation of Greek subsidiary Emporiki Bank for the full quarter.

Net banking income rose by 14.3% relative to the fourth quarter of 2005, and gross operating income was up 12.7%.

Risk-related costs remained very low, falling by 28.3%.

Overall, net income (Group share) was EUR 1,105 million, up 9.8% compared with the fourth quarter of 2005.

+-------------------------+---------+---------+--------------+----------+
|in € millions            |   Q4-06 |   Q4-05 |  Change Q4/Q4|    2006  |
+-------------------------+---------+---------+--------------+----------+
|Net banking income       |    4,208|    3,682|        +14.3%|    16,187|
+-------------------------+---------+---------+--------------+----------+
|Operating expenses       |  (2,846)|  (2,474)|        +15.0%|  (10,355)|
+-------------------------+---------+---------+--------------+----------+
|Gross operating income * |    1,362|    1,208|        +12.7%|     5,832|
+-------------------------+---------+---------+--------------+----------+
|Risk-related costs       |    (147)|    (205)|       (28.3%)|     (612)|
+-------------------------+---------+---------+--------------+----------+
|Equity affiliates        |      380|      350|         +8.6%|     1,671|
+-------------------------+---------+---------+--------------+----------+
|Net gain (loss) on       |     (35)|      (4)|          n.m.|        21|
|disposal of other assets |         |         |              |          |
+-------------------------+---------+---------+--------------+----------+
|Integration-related costs|        -|     (47)|          n.m.|         -|
+-------------------------+---------+---------+--------------+----------+
|Tax                      |    (343)|    (206)|        +66.5%|   (1,590)|
+-------------------------+---------+---------+--------------+----------+
|Net income               |    1,214|    1,096|        +10.8%|     5,319|
+-------------------------+---------+---------+--------------+----------+
|Net income (Group share) |    1,105|    1,006|         +9.8%|     4,920|
+-------------------------+---------+---------+--------------+----------+
|Cost/income ratio        |    67.6%|    67.2%|     + 0.4 pts|     64.0%|
+-------------------------+---------+---------+--------------+----------+
|ROE                      |         |         |              |     17.0%|
+-------------------------+---------+---------+--------------+----------+

+-------------------------+---------+------------------+
|in € millions            |   2005  |  Change 2006/2005|
+-------------------------+---------+------------------+
|Net banking income       |   13,693|            +18.2%|
+-------------------------+---------+------------------+
|Operating expenses       |  (9,166)|            +13.0%|
+-------------------------+---------+------------------+
|Gross operating income * |    4,527|            +28.8%|
+-------------------------+---------+------------------+
|Risk-related costs       |    (643)|            (4.8%)|
+-------------------------+---------+------------------+
|Equity affiliates        |    1,490|            +12.1%|
+-------------------------+---------+------------------+
|Net gain (loss) on       |       36|           (41.7%)|
|disposal of other assets |         |                  |
+-------------------------+---------+------------------+
|Integration-related costs|    (219)|              n.m.|
+-------------------------+---------+------------------+
|Tax                      |    (942)|            +68.8%|
+-------------------------+---------+------------------+
|Net income               |    4,249|            +25.2%|
+-------------------------+---------+------------------+
|Net income (Group share) |    3,891|            +26.4%|
+-------------------------+---------+------------------+
|Cost/income ratio        |    66.9%|         (2.9 pts)|
+-------------------------+---------+------------------+
|ROE                      |    15.8%|                  |
+-------------------------+---------+------------------+
FINANCIAL POSITION

Crédit Agricole S.A.'s shareholders' equity (Group share) amounted to EUR 35.1 billion at end-December 2006, up 14.3% compared with EUR 30.7 billion at end- December 2005.

Risk-weighted assets totalled EUR 263.6 billion at end-December 2006, an increase of 7.1% over the year.

RESULTS BY BUSINESS LINE

All of Crédit Agricole S.A.'s business lines saw strong growth in their contribution to net income (Group share), which rose by 20.6%. There was a particularly sharp increase in the contribution from asset management, insurance and private banking, as well as corporate and investment banking.

ROE of all business lines improved significantly to 20.4%.

1. FRENCH RETAIL BANKING

The Regional Banks achieved business growth in all their markets in 2006. They maintained their renewed commercial effort, which began in late 2005, by introducing new products and services as part of Crédit Agricole's new strategic market position.

1.1. French retail banking - Regional Banks

In 2006, the Regional Banks' contribution to Group income was EUR 848 million, down from EUR 854 million in 2005. After tax on dividends received from the Regional Banks, their contribution to Crédit Agricole S.A.'s consolidated net income was EUR 759 million.

In a highly competitive operating environment, with severe pressure on margins and historically low interest rates, the Regional Banks' performance reflects buoyant business levels, a firm grip on operating expenses and prudent risk control. Operational performance is improving constantly.

On- and off-balance sheet customer deposits increased by 6.1% year-on-year to over EUR 485 billion. This growth was due to a strong showing in bank deposits, with a 44.8% increase in term deposit accounts and a 20.1% rise in savings accounts. However, growth in customer assets was restricted by a net outflow of EUR 5.7 billion (6.6% of the total) from home purchase savings products, which have become less attractive following tax changes. Sight deposits were up 5.1%. Off-balance sheet deposits were boosted by very strong inflows, due in particular to the reinvestment of home purchase savings. Life insurance remained the most popular vehicle (+12.9%).

The Regional Banks' lending business grew strongly. New lending totalled EUR 68.9 billion, an 11% increase on the already high level achieved in 2005. Loan production advanced significantly in all customer segments. Demand remained firm in mortgages (EUR 38.9 billion, up 11.2%) and consumer credit (EUR 5.7 billion, up 8.4%), but also in lending to local authorities (EUR 4.1 billion, up 24.5%), businesses (EUR 8 billion, up 13.9%) and professionals and farmers (EUR 11bn, up 4.2%).

This firm lending activity caused the Regional Banks' gross loans outstanding to rise by 10.7%, beating the 10.2% increase seen in 2005. Outstandings rose by 14.7% in mortgages and 12.8% in business lending, to reach EUR 296.2 billion by end-2006.

Net banking income increased by 5.4% to EUR 12.8 billion (aggregate non- consolidated figures) and by 3.6% excluding dividends and similar income from Crédit Agricole S.A. Excluding the impact of home purchase savings plans, the increase was 1.6%. Net banking income benefited from firm growth in fee and commissions income (up 9.6%), particularly due to sales of insurance products and the development of banking services across a broader customer base.

In a context of stiff competition and amortisation of high margin post loan portfolios, the interest margin remains almost flat, rising by only 0.1% in 2006.

+-------------------------+-------+--------------+--------------+------+
|In € millions            |  Q4-06|  Change Q4/Q4|  Change Q4/Q3|  2006|
+-------------------------+-------+--------------+--------------+------+
|Net income accounted for |    227|        +23.2%|        +10.7%|   748|
|at equity (at 25%)       |       |              |              |      |
+-------------------------+-------+--------------+--------------+------+
|Change in share of       |    (4)|          n.m.|          n.m.|   100|
|reserves                 |       |              |              |      |
+-------------------------+-------+--------------+--------------+------+
|Contribution of equity   |    223|        +11.1%|        +10.5%|   848|
|affiliates               |       |              |              |      |
+-------------------------+-------+--------------+--------------+------+
|Tax*                     |    (2)|          n.m.|          n.m.|  (89)|
+-------------------------+-------+--------------+--------------+------+
|Net income (Group share) |    221|        +10.1%|         +9.6%|   759|
+-------------------------+-------+--------------+--------------+------+

+-------------------------+------------------+
|In € millions            |  Change 2006/2005|
+-------------------------+------------------+
|Net income accounted for |             +4.9%|
|at equity (at 25%)       |                  |
+-------------------------+------------------+
|Change in share of       |           (28.4%)|
|reserves                 |                  |
+-------------------------+------------------+
|Contribution of equity   |            (0.6%)|
|affiliates               |                  |+-------------------------+-------
-----------+
|Tax*                     |            +18.7%|
+-------------------------+------------------+
|Net income (Group share) |            (2.5%)|
+-------------------------+------------------+
* Tax impact on dividends received from the Regional Banks

Operating expenses were well under control at EUR 6.8 billion (+2.4%). The increase reflects higher staff costs, with 585 permanent staff being added to the workforce, along with increased commercial investment, due in particular to the roll-out of the new branch concept (86 openings in 2006).

Gross operating income grew by 5.2% to EUR 5,237 million. The cost/income ratio improved again, falling by 0.7 percentage points to 56.6%.

The 29% rise in risk-related costs to EUR 836 million was mainly due to increased provisions at the Regional Banks, prompted by Basel II methodology.

Nevertheless, risk-related costs remain low, equal to 33 basis points of risk- weighted assets.

The Group's share of the Regional Banks' income was EUR 848 million, down from EUR 854 million in 2005. After tax on dividends received by Crédit Agricole S.A., their contribution to Crédit Agricole S.A.'s consolidated net income was EUR 759 million.

ROE was 17%.

In the fourth quarter of 2006, the Regional Banks generated gross operating income of EUR 1,234 million, up 3.7% compared with the fourth quarter of 2005. The cost/income ratio was 56.0%.

The contribution to Crédit Agricole S.A.'s net income (Group share) was EUR 221 million, an increase of 10.1% compared with the fourth quarter of 2005.

1.2 French retail banking - LCL

The LCL network continued the very strong performance it achieved in 2005, with gross operating income up by more than 14%. Although the operating environment was highly competitive, LCL maintained its commercial impetus with effective TV advertising and innovating promotions. The new LCL brand, which was launched in late August 2005, is now well established, 6 out of 10 people in France recognise it at end-2006. Almost 80,000 new accounts were opened in 2006.

On- and off-balance sheet customer deposits increased by 4.9% to EUR 133.1 billion at end-2006. Within on-balance sheet deposits, savings accounts performed very well (up 14.2%), particularly due to the success of the Livret Cerise account. However, home purchase savings fell by 14.4%, due to changes in tax rules in late 2005. Global deposits are in line with market trends. Private Bank generated 18,000 new contracts in 2006.

Life insurance remained the preferred investment vehicle, with inflows of EUR 5.4 billion and total assets under management of EUR 36.3 billion at end-2006, an increase of 10.8%.

Lending accelerated sharply in 2006, with loans outstanding up 14.4% to EUR 61.6 billion at year-end. This strong performance was due to increased momentum in mortgages, along with much stronger business lending.

Mortgage loans outstanding jumped by 18.7% to EUR 35.4 billion, with new loan production hitting a record EUR 13 billion. Professional loans outstanding rose by 10%, due to a 23% rise in production, driven in particular by independent professionals.

Business lending takes advantage of its dedicated network's drive. Production was up 28.6%, and growth in loans outstanding accelerated from 4.3% in 2005 to 14.5% in 2006.

+-------------------------+-------+--------------+--------------+---------+
|In € millions            |  Q4-06|  Change Q4/Q4|  Change Q4/Q3|   2006  |
+-------------------------+-------+--------------+--------------+---------+
|Net banking income       |    914|       +0 0.5%|         +4.1%|    3,652|
+-------------------------+-------+--------------+--------------+---------+
|Operating expenses       |  (637)|         +0.4%|         +4.1%|  (2,495)|
+-------------------------+-------+--------------+--------------+---------+
|Gross operating income   |    277|         +0.6%|         +4.1%|    1,157|
+-------------------------+-------+--------------+--------------+---------+
|Risk-related costs       |   (41)|       (31.5%)|         +6.7%|    (151)|
+-------------------------+-------+--------------+--------------+---------+
|Pre-tax income           |    236|         +9.6%|         +3.6%|    1,006|
+-------------------------+-------+--------------+--------------+---------+
| Net income (Group share)|    160|         +9.4%|         +3.9%|      680|
+-------------------------+-------+--------------+--------------+---------+
|Cost/income ratio        |  69.7%|       0.0 pts|       0.0 pts|    68.3%|
+-------------------------+-------+--------------+--------------+---------+
|Allocated capital (€bn)  |       |              |              |      2.7|
+-------------------------+-------+--------------+--------------+---------+
|ROE                      |       |              |              |    25.9%|
+-------------------------+-------+--------------+--------------+---------+
+-------------------------+-------+--------------+--------------+---------+

+-------------------------+------------------+
|In € millions            |  Change 2006/2005|
+-------------------------+------------------+
|Net banking income       |             +4.3%|
+-------------------------+------------------+
|Operating expenses       |            +0.3 %|
+-------------------------+------------------+
|Gross operating income   |            +14.1%|
+-------------------------+------------------+
|Risk-related costs       |              0.5%|
+-------------------------+------------------+
|Pre-tax income           |            +16.5%|
+-------------------------+------------------+
| Net income (Group share)|            +15.2%|
+-------------------------+------------------+
|Cost/income ratio        |         (2.7 pts)|
+-------------------------+------------------+
|Allocated capital (€bn)  |                  |
+-------------------------+------------------+
|ROE                      |                  |
+-------------------------+------------------+
+-------------------------+------------------+
The LCL strong commercial momentum resulted in a 4.3% rise in net banking income to EUR 3,652 million. Excluding the impact of provisions for home purchase savings plans and non-recurring items in 2005, net banking income was up 1.7%.

Operating expenses were near-flat at EUR 2,495 million (+0.3%). The cost of IT and commercial initiatives was offset by ongoing improvements in operating processes.

As a result of this excellent cost control, the cost/income ratio fell by a further 2.7 points, from 71.0% to 68.3%.

Risk-related costs remained low, at 33 basis points of risk-weighted assets, down from 37 basis points in 2005.

Net income (Group share) came to EUR 680 million, an increase of 15.2% compared with 2005, giving a ROE of 25.9%.

In the fourth quarter of 2006, net banking income rose by 0.5% year-on-year. Operating expenses were again under control, rising by just 0.4% compared with the fourth quarter of 2005, despite significant marketing expenditure. Net income (Group share) was EUR 160 million, an increase of 9.4% compared with the fourth quarter of 2005.

2. INTERNATIONAL RETAIL BANKING

In 2006, the international retail banking business line stepped up its acquisition activity, in line with the 2006-2008 development plan. Operations were strengthened significantly in Europe, particularly the Mediterranean basin.

Two major investments in the eurozone transformed the Group's positions in Greece and Italy, turning them from minority stakes into controlled subsidiaries. In August, the Group acquired Emporiki Bank S.A. in Greece. Then, the announcement in late 2006 and the realisation in early 2007, it acquired Cariparma, FriulAdria and 202 Banca Intesa branches, forming a network of 663 branches in Italy.

It also continued to acquire small units in countries seeing rapid growth in the adoption of banking services, i.e. Egypt, Ukraine and Serbia.

As a result of these investments, gross operating income in the international retail banking business line rose almost fourfold, from EUR 50 million in 2005 to EUR 199 million in 2006. Net banking income was up by a factor of 2.6 to EUR 824 million, while operating expenses increased by a factor of 2.3 to EUR 625 million.

Although Emporiki's contribution was limited to around four and a half months, it was the main contributor to gross operating income (EUR 121 million). Crédit Agricole Egypt generated gross operating income of EUR 28 million. This includes six months of EAB operating alone, and four months following its combination with Calyon Egypt. Meridian Bank's gross operating income was EUR 7 million.

Risk-related costs totalled EUR 73 million, including the impact of acquisitions and adjustments to Group standards.

International retail banking's contribution to the Group's net income consisted primarily of income from equity affiliates, which rose by 15.4% to EUR 522 million. Banca Intesa remained the main contributor in 2006, with estimated income (based on December 2006 consensus estimates) of EUR 419 million, up 11.2% relative to the 2005 figure of EUR 377 million. Income from other equity affiliates rose by 36.5%, with an improved contribution from Banco Espirito Santo, Crédit Agricole Belgique and Banco del Desarrollo.

The EUR 76 million tax takes into account a one-off expense of EUR 54 million, due to new tax rules in Greece.

Overall, the business line generated net income (Group share) of EUR 530 million, an increase of 20.6% compared with 2005, giving a ROE of 15.4%.

+-------------------------+-------+--------------+--------------+-------+
|In € millions            |  Q4-06|  Change Q4/Q4|  Change Q4/Q3|  2006 |
+-------------------------+-------+--------------+--------------+-------+
|Net banking income       |    367|         x 4.1|        +55.9%|    824|
+-------------------------+-------+--------------+--------------+-------+
|Operating expenses       |  (267)|         x 3.7|        +47.5%|  (625)|
+-------------------------+-------+--------------+--------------+-------+
|Gross operating income * |    100|         x 5.4|        +84.0%|    199|
+-------------------------+-------+--------------+--------------+-------+
|Risk-related costs       |   (19)|        (0.5%)|       (39.8%)|   (73)|
+-------------------------+-------+--------------+--------------+-------+
|Equity affiliates        |    120|        +12.0%|       (15.1%)|    522|
+-------------------------+-------+--------------+--------------+-------+
|Net gain (loss) on       |      -|          n.m.|          n.m.|      -|
|disposal of other assets |       |              |              |       |
+-------------------------+-------+--------------+--------------+-------+
|Pre-tax income           |    201|        +88.8%|         22.7%|    648|
+-------------------------+-------+--------------+--------------+-------+
|Net income (Group share) |    120|        +26.3%|       (18.5%)|    530|
+-------------------------+-------+--------------+--------------+-------+
|Cost/income ratio        |  72.7%|     (6.6 pts)|     (4.2 pts)|  75.8%|
+-------------------------+-------+--------------+--------------+-------+
|Allocated capital (€bn)  |       |              |              |    3.8|
+-------------------------+-------+--------------+--------------+-------+
|ROE                      |       |              |              |  15.4%|
+-------------------------+-------+--------------+--------------+-------+

+-------------------------+-------------------+
|In € millions            |  Change 2006/2005*|
+-------------------------+-------------------+
|Net banking income       |               x2.6|
+-------------------------+-------------------+
|Operating expenses       |               x2.3|
+-------------------------+-------------------+
|Gross operating income * |              x 3.9|
+-------------------------+-------------------+
|Risk-related costs       |              x 2.2|
+-------------------------+-------------------+
|Equity affiliates        |             +15.4%|
+-------------------------+-------------------+
|Net gain (loss) on       |               n.m.|
|disposal of other assets |                   |
+-------------------------+-------------------+
|Pre-tax income           |             +38.0%|
+-------------------------+-------------------+
|Net income (Group share) |             +20.6%|
+-------------------------+-------------------+
|Cost/income ratio        |          (8.3 pts)|
+-------------------------+-------------------+
|Allocated capital (€bn)  |                   |
+-------------------------+-------------------+
|ROE                      |                   |
+-------------------------+-------------------+
* In 2005, before integration-related costs

In the fourth quarter of 2006, net banking income came to EUR 367 million, up by a factor of 4.1 compared with the year-earlier period, while gross operating income was up by a factor of 5.4, as a result of acquisitions.

3. SPECIALISED FINANCIAL SERVICES

2006 was a year of development and expansion in Specialised Financial Services. All three activities - consumer credit, leasing and factoring - showed innovation and an aggressive commercial approach, strengthening leading positions both in France and abroad. The acquisition of a 50% stake in Fiat Auto Financial Services (FAFS) at the end of the year represents a major step forward, broadening the Group's presence in consumer credit to 19 European countries.

There was further steady growth in business levels and income in 2006.

Consumer credit scored a number of successes in 2006: Sofinco's new corporate image was launched, 200,000 customers applied for Sofinco's new bank card, the Crédit Lift business was adapted for near-prime customers at the end of the year, and the ReceiveAndPay service rounded out the e-commerce offering. Finaref also made two major innovations, introducing electronic signatures in France and launching the first contactless revolving credit card in Denmark, in partnership with a retailer.

Annual growth of consumer credit book rose by 8.2% to more than EUR 25 billion, with 43% coming from outside France.

This international development is taking place through strong organic growth, efforts to strengthen international partnerships and expansion into new territories.

At end-December 2006, the consumer credit book amounted to over EUR 49.5 billion, an increase of 33.4% compared with 2005. Excluding the integration of FAFS (which boosted the consumer credit book by EUR 8.9 billion), growth was still strong at 11%.

Outside France, consumer credit outstandings totalled EUR 24.4 billion at year- end, accounting for almost 50% of the total as opposed to less than 29% two years ago. International growth continued to be driven by Italy (+26%), Portugal (+57%), Greece (+116%) and Morocco (+25%).

In France, co-operation with the Regional Banks is developing rapidly, particularly with the TEMA product.

In leasing, Crédit Agricole Leasing and EFL consolidated their market presence in 2006, with total production up 3.5% at EUR 4.4 billion. Despite stiff competition and a lack of major operations in the French market, Crédit Agricole Leasing achieved firm production in the financing of sustainable development and the public sector (+17%). EFL growth rose by 32%.

The factoring business continued to perform well, with factored receivables up 13.7% to EUR 35 billion in a very competitive market. Growth was even stronger outside France, at 26.1%. International subsidiaries generated 36% of the Group's factoring revenues in 2006, as opposed to less than 30% two years previously. Germany remained the principal contributor, accounting for 56% of the international business following a 39% rise in revenues in 2006. In France, revenues rose by 7.9%.

+-------------------------+-------+--------------+--------------+---------+
|In € millions            |  Q4-06|  Change Q4/Q4|  Change Q4/Q3|   2006  |
+-------------------------+-------+--------------+--------------+---------+
|Net banking income       |    682|         +2.0%|         +5.6%|    2,637|
+-------------------------+-------+--------------+--------------+---------+
|Operating expenses       |  (366)|         +7.0%|         +7.9%|  (1,389)|
+-------------------------+-------+--------------+--------------+---------+
|Gross operating income * |    316|        (3.2%)|         +3.0%|    1,248|
+-------------------------+-------+--------------+--------------+---------+
|Risk-related costs       |  (102)|       (14.2%)|        (3.7%)|    (421)|
+-------------------------+-------+--------------+--------------+---------+
|Operating income *       |    214|         +3.0%|         +6.5%|      827|
+-------------------------+-------+--------------+--------------+---------+
|Equity affiliates        |      1|          n.m.|          n.m.|        7|
+-------------------------+-------+--------------+--------------+---------+
|Net gain (loss) on       |   (64)|          n.m.|          n.m.|     (59)|
|disposal of other assets |       |              |              |         |
+-------------------------+-------+--------------+--------------+---------+
|Pre-tax income           |    151|       (26.4%)|       (27.0%)|      774|
+-------------------------+-------+--------------+--------------+---------+
|Net income (Group share) |     73|       (44.1%)|       (44.2%)|      463|
+-------------------------+-------+--------------+--------------+---------+
|Cost/income ratio*       |  53.6%|     + 2.5 pts|      +1.2 pts|    52.7%|
+-------------------------+-------+--------------+--------------+---------+
|Allocated capital (€bn)  |       |              |              |      2.5|
+-------------------------+-------+--------------+--------------+---------+
|ROE                      |       |              |              |    22.3%|
+-------------------------+-------+--------------+--------------+---------+

+-------------------------+------------------+
|In € millions            |  Change 2006/2005|
+-------------------------+------------------+
|Net banking income       |             +6.9%|
+-------------------------+------------------+
|Operating expenses       |             +7.6%|
+-------------------------+------------------+
|Gross operating income * |             +6.2%|
+-------------------------+------------------+
|Risk-related costs       |             +5.9%|
+-------------------------+------------------+
|Operating income *       |             +6.4%|
+-------------------------+------------------+
|Equity affiliates        |              n.m.|
+-------------------------+------------------+
|Net gain (loss) on       |           (28.4%)|
|disposal of other assets |                  |
+-------------------------+------------------+
|Pre-tax income           |            +14.8%|
+-------------------------+------------------+
|Net income (Group share) |            +15.3%|
+-------------------------+------------------+
|Cost/income ratio*       |         + 0.3 pts|
+-------------------------+------------------+
|Allocated capital (€bn)  |                  |
+-------------------------+------------------+
|ROE                      |                  |
+-------------------------+------------------+
* In 2005, before integration-related costs

In 2006, net banking income for the division as a whole increased by 6.9% to EUR 2,637 million. The 7.6% rise in operating expenses was due to international business development and acquisitions. Gross operating income rose by 6.2% to EUR 1,248 million. The cost/income ratio was kept below 53%.

Risk-related costs remained low at EUR 421 million. The 5.9% rise in risk- related costs resulted from business development, particularly outside France.

After impairment charges on Crédit Agricole Leasing goodwill, net income (Group share) was EUR 463 million, an increase of 15.3%.

Return on equity was 22.3%.

In the fourth quarter of 2006, net income (Group share) rose by 3.0% year-on- year to EUR 214 million.

4. ASSET MANAGEMENT, INSURANCE AND PRIVATE BANKING

Asset management, insurance and private banking delivered significant improvement in commercial performance and income. Net new money (excluding double-counting) was very strong at EUR 637 million, up 13.2%. Net income (Group share) rose by 27.9% to EUR 1,566 million.

- Asset management achieved further international expansion and robust business levels in France. The Group won a number of awards for its asset management products and investment quality, including the Atout Vivactions special jury prize and the institutional innovation award for CAAM Volatilité Actions. In addition, Crédit Agricole won the Corbeille d'Or 2006 award, with LCL in third place.

- In the securities business, CACEIS had considerable commercial success and generated strong earnings in its first full year of existence.

- Private banking enjoyed firm organic growth in 2006, benefiting from its reorganisation both in France and abroad.

- In insurance, there was excellent commercial performance across all product ranges and all distribution networks. In addition, the Group acquired majority stakes in Portuguese insurance.

In Asset Management, AuM exceeded EUR 551 billion at end-2006, an increase of 12.2%. Excluding CAAM Sgr in Italy, assets under management totalled EUR 490.4 billion, up 15.7%. At constant scope and valuation methods, AuM rose by 15.1%, or by EUR 66.5 billion. Net new money was very strong in 2006, amounting to EUR 46 billion excluding Italy.

Expansion outside France continued, and international subsidiaries accounted for 43% of net new money. CAAM has become Spain's leading foreign asset management company.

In Asia, CAAM already operates in Japan, Hong Kong, South Korea and Singapore, and intends to move into China through an asset management joint venture with Agricultural Bank of China (subject to approval by the authorities). In the Pacific zone, CAAM is building its presence in Australia and New Zealand, and opened a sales and representative office in Sydney in late January 2007.

In institutional financial services, CACEIS achieved strong growth in 2006. Assets under custody totalled EUR 1,787 billion at year-end, representing an increase of 16% or EUR 240 billion. Assets under administration amounted to EUR 860 billion, up 15%.

In private banking, assets under management totalled EUR 88 billion at the end of 2006. This represents an increase of 10.5% or EUR 8.4 billion, resulting mainly from a sharp increase in net new money (EUR 6.1 billion). In France, the successful partnership between BGPI and the Regional Banks has led to a broader product range and more innovative services.

Outside France, the Group has adopted a single brand (Crédit Agricole Private Bank), and geographical coverage improved in 2006 through the creation of new units in high-growth regions such as the Middle East, Latin America and Asia. Aggressive commercial efforts boosted sales of high-value-added products (structured products, alternative investments and private equity), a strong growth in assets, while operating margins held steady.

The life insurance business saw very strong business levels in a highly buoyant market. This robust performance strengthened its position as France's second- largest life insurer. Total premium income at Predica, Finaref Vie and BES Vida (excluding policy renewals and Fourgous transfers) was EUR 24.6 billion. Business levels were partly supported by transfers from home purchase savings plans, which suffered from outflows following changes to tax rules in late 2005.

In 2006, Predica repositioned its product range, with the focus on multi- investment policies. This resulted in strong growth in unit-linked premium income (up 82.7%). The proportion of savings inflows relating to unit-linked policies rose from 13% in 2005 to 19% in 2006. Non-unit-linked policies worth more than EUR 1.4 billion were converted into multi-investment policies (as authorised by the Fourgous amendment). As a result, unit-linked policies accounted for more than 30% of all life insurance assets under management.

In property/casualty insurance, the Group generated extremely strong growth in a mature market, and maintained its position as France's second-largest property/casualty bancassurance player. Premium income increased by 22.4% compared with 2005. 1.272 million new policies were written and Pacifica's total portfolio increased by 13.5% year-on-year to over 5.3 million policies. In 2006, Pacifica dealt with its 3 millionth claim since its creation. Finaref sold nearly 1.261 million new policies, 32% more than in 2005.

+-------------------------+-------+--------------+--------------+---------+
|In € millions            |  Q4-06|  Change Q4/Q4|  Change Q4/Q3|   2006  |
+-------------------------+-------+--------------+--------------+---------+
|Net banking income       |  1,086|        +10.0%|        +22.6%|    3,873|
+-------------------------+-------+--------------+--------------+---------+
|Operating expenses       |  (467)|         +7.5%|        +18.1%|  (1,680)|
+-------------------------+-------+--------------+--------------+---------+
|Gross operating income * |    620|        +12.0%|        +26.2%|    2,192|
+-------------------------+-------+--------------+--------------+---------+
|Risk-related costs       |    (1)|          n.m.|          n.m.|      (7)|
+-------------------------+-------+--------------+--------------+---------+
|Equity affiliates        |      4|          n.m.|          n.m.|       46|
+-------------------------+-------+--------------+--------------+---------+
|Net gain (loss) on       |     24|          n.m.|          n.m.|       21|
|disposal of other assets |       |              |              |         |
+-------------------------+-------+--------------+--------------+---------+
|Pre-tax income           |    646|        +14.8%|        +32.4%|    2,252|
+-------------------------+-------+--------------+--------------+---------+
|Net income (Group share) |    485|        +34.6%|        +47.2%|    1,566|
+-------------------------+-------+--------------+--------------+---------+
|Cost/income ratio*       |  42.9%|     (1.0 pts)|     (1.6 pts)|    43.5%|
+-------------------------+-------+--------------+--------------+---------+
|Allocated capital (€bn)  |       |              |              |      7.2|
+-------------------------+-------+--------------+--------------+---------+
|ROE                      |       |              |              |    21.7%|
+-------------------------+-------+--------------+--------------+---------+

+-------------------------+------------------+
|In € millions            |  Change 2006/2005|
+-------------------------+------------------+
|Net banking income       |            +16.2%|
+-------------------------+------------------+
|Operating expenses       |            +14.7%|
+-------------------------+------------------+
|Gross operating income * |            +17.4%|
+-------------------------+------------------+
|Risk-related costs       |              n.m.|
+-------------------------+------------------+
|Equity affiliates        |            +63.2%|
+-------------------------+------------------+
|Net gain (loss) on       |              n.m.|
|disposal of other assets |                  |
+-------------------------+------------------+
|Pre-tax income           |            +20.0%|
+-------------------------+------------------+
|Net income (Group share) |            +27.9%|
+-------------------------+------------------+
|Cost/income ratio*       |         (0.4 pts)|
+-------------------------+------------------+
|Allocated capital (€bn)  |                  |
+-------------------------+------------------+
|ROE                      |                  |
+-------------------------+------------------+
* In 2005, before integration-related costs

** Excluding the CAAM transaction in Italy

In 2006, net banking income grew very strongly, by 16.2% (11.7% at constant scope) to EUR 3,873 million. Operating expenses rose by 14.7% to EUR 1,680 million, although the increase was only 9.6% at constant scope. Gross operating income rose by 17.4% to EUR 2,192 million. At constant scope, the increase was 13.3%. The cost/income ratio fell to 43.5%. Income from equity affiliates rose by 63.2% from EUR 28 million in 2005 to EUR 46 million in 2006. This was mainly due to the contribution of the Portuguese insurance subsidiaries.

The net income (Group share) rose EUR 1,566 million, up 27,9% giving a ROE of 21.7%.

Business levels in the fourth quarter remained robust in all segments. Net banking income increased by 10.0% compared with the fourth quarter of 2005 to EUR 1,086 million. Despite this strong revenue growth, operating expenses were contained. This led to growth of 12.0% in gross operating income and an improvement in the cost/income ratio to 42.9%. Net income (Group share) came to EUR 485 million, up 34.6% compared with the fourth quarter of 2005.

5. CORPORATE AND INVESTMENT BANKING

In corporate and investment banking, a number of advances were achieved in the various business segments in 2006, confirming the Group's leading positions. The corporate and investment banking business line is world number one in project financing, as well as ranking fourth in export financing and fifth in structured commodity financing. As regards French securities brokerage in Europe and Asian equities brokerage, Calyon's subsidiaries rank number one in Europe and number two worldwide for SRI research and rank second in the Asian brokerage sector.

In 2006, all segments strengthened their positions, and Calyon was one of Europe's leading corporate and investment banking players, with sharply improved performance relative to 2005. Net banking income was up 22.4%, gross operating income up 30.0% and net income (Group share) up 32.2%.

Corporate and investment banking generated strong revenues in 2006, and achieved a sharp improvement in operational efficiency and profitability. These results support the Group's profitable growth objectives for this business line.

Revenues increased strongly (by 22.4% or 23.5% at constant exchange rates) to EUR 5,456 million. The business mix continued to improve, in line with the Group's business development plan. Customer revenues accounted for 83% of the total, and the business portfolio remained well balanced. Capital markets and investment banking revenues made up 60.9% of the business line's net banking income, having grown at a CAGR of 27% since 2004.

Operating expenses rose by 18% to EUR 3,321 million. This includes a 10.6% increase in fixed costs, which is modest given business levels and investment efforts during the year. In particular, the workforce grew by 3.8% with the addition of 400 staff, mainly in brokerage and capital markets front-office activities. Efforts to enhance IT systems in capital markets, brokerage and international networks were maintained.

Gross operating income came in up 30% at EUR 2,135 million, while the cost/income ratio fell by 2.2 points to 60.9%. Income from equity affiliates rose by 32.5% to EUR 160 million, driven by brokerage earnings at Banque Al Saudi Al Fransi.

+-------------------------+-------+---------------+---------------+---------+
|In € millions            |  Q4-06|  Change Q4/ Q4|  Change Q4/ Q3|   2006  |
+-------------------------+-------+---------------+---------------+---------+
|Net banking income       |  1,324|         +10.6%|          +6.6%|    5,456|
+-------------------------+-------+---------------+---------------+---------+
|Operating expenses       |  (869)|         +14.3%|         +12.9%|  (3,321)|
+-------------------------+-------+---------------+---------------+---------+
|Gross operating income * |    455|          +4.2%|         (3.8%)|    2,135|
+-------------------------+-------+---------------+---------------+---------+
|Risk-related costs       |     20|           n.m.|           n.m.|       10|
+-------------------------+-------+---------------+---------------+---------+
|Equity affiliates        |     28|        (17.3%)|        (29.7%)|      159|
+-------------------------+-------+---------------+---------------+---------+
|Net gain (loss) on       |    (4)|         +33.3%|           n.m.|      (5)|
|disposal of other assets |       |               |               |         |
+-------------------------+-------+---------------+---------------+---------+
|Pre-tax income           |    499|         +16.1%|         (4.3%)|    2,299|
+-------------------------+-------+---------------+---------------+---------+
|Net income (Group share) |    353|          +9.6%|         (7.3%)|    1,657|
+-------------------------+-------+---------------+---------------+---------+
|Cost/income ratio        |  65.6%|      + 2.1 pts|      + 3.7 pts|    60.9%|
+-------------------------+-------+---------------+---------------+---------+
|Allocated capital (€bn)  |       |               |               |      8.3|
+-------------------------+-------+---------------+---------------+---------+
|ROE                      |       |               |               |    20.9%|
+-------------------------+-------+---------------+---------------+---------+

+-------------------------+------------------+
|In € millions            |  Change 2006/2005|
+-------------------------+------------------+
|Net banking income       |            +22.4%|
+-------------------------+------------------+
|Operating expenses       |            +18.0%|
+-------------------------+------------------+
|Gross operating income * |            +30.0%|
+-------------------------+------------------+
|Risk-related costs       |              n.m.|
+-------------------------+------------------+
|Equity affiliates        |            +32.5%|
+-------------------------+------------------+
|Net gain (loss) on       |              n.m.|
|disposal of other assets |                  |
+-------------------------+------------------+
|Pre-tax income           |            +35.5%|
+-------------------------+------------------+
|Net income (Group share) |            +32.2%|
+-------------------------+------------------+
|Cost/income ratio        |         (2.2 pts)|
+-------------------------+------------------+
|Allocated capital (€bn)  |                  |
+-------------------------+------------------+
|ROE                      |                  |
+-------------------------+------------------+
*Before integration-related costs in 2005

Net income (Group share) was EUR 1,657 million, up 32.2%. ROE was 20.9%.

Financing activities

+-------------------------+--------------------+--------------+---------------+
|In € millions            |Q4-06               |  Change Q4/Q4|  Change Q4/ Q3|
+-------------------------+--------------------+--------------+---------------+
|Net banking income       |                 516|         +6.3%|         (3.2%)|
+-------------------------+--------------------+--------------+---------------+
|Operating expenses       |Gross operating     |         (229)|            287|
|                         |income *            |              |               |
+-------------------------+--------------------+--------------+---------------+
|Excluding regulatory     |Excluding regulatory|              |               |
|changes affecting        |changes affecting   |              |               |
|employee benefit         |employee benefit    |              |               |
|liabilities              |liabilities         |              |               |
+-------------------------+--------------------+--------------+---------------+
|                         |+7.9%               |      (0.9%)  |               |
+-------------------------+--------------------+--------------+---------------+
|Operating expenses       |Gross operating     |         (229)|            287|
|                         |income *            |              |               |
+-------------------------+--------------------+--------------+---------------+
|Excluding regulatory     |Excluding regulatory|              |               |
|changes affecting        |changes affecting   |              |               |
|employee benefit         |employee benefit    |              |               |
|liabilities              |liabilities         |              |               |
+-------------------------+--------------------+--------------+---------------+
|                         |+5.3%               |              |       (4.8%)  |
+-------------------------+--------------------+--------------+---------------+
|Risk-related costs       |                  20|          n.m.|           n.m.|
+-------------------------+--------------------+--------------+---------------+
|Equity affiliates        |                  28|       (19.7%)|        (27.9%)|
+-------------------------+--------------------+--------------+---------------+
|Net gain (loss) on       |                 (5)|       (28.6%)|           n.m.|
|disposal of other assets |                    |              |               |
+-------------------------+--------------------+--------------+---------------+
|Pre-tax income           |                 330|        +14.4%|         (8.0%)|
+-------------------------+--------------------+--------------+---------------+
|Tax                      |                (82)|        +37.2%|         (5.0%)|
+-------------------------+--------------------+--------------+---------------+
|Net income (Group share) |                 232|         +4.5%|        (13.2%)|
+-------------------------+--------------------+--------------+---------------+
|Cost/income ratio        |               44.5%|     (2.9 pts)|    (+ 3.2 pts)|
+-------------------------+--------------------+--------------+---------------+
|ROE                      |                    |              |               |
+-------------------------+--------------------+--------------+---------------+

+-------------------------+--------+------------------+
|In € millions            |   2006 |  Change 2006/2005|
+-------------------------+--------+------------------+
|Net banking income       |   2,135|            +14.0%|
+-------------------------+--------+------------------+
|Operating expenses       |  +13.3%|             +1.3%|
|                         |        |                  |
+-------------------------+--------+------------------+
|Excluding regulatory     |        |                  |
|changes affecting        |        |                  |
|employee benefit         |        |                  |
|liabilities              |        |                  |
+-------------------------+--------+------------------+
|                         |        |                  |
+-------------------------+--------+------------------+
|Operating expenses       |  +13.3%|             +1.3%|
|                         |        |                  |
+-------------------------+--------+------------------+
|Excluding regulatory     |        |                  |
|changes affecting        |        |                  |
|employee benefit         |        |                  |
|liabilities              |        |                  |
+-------------------------+--------+------------------+
|                         |        |                  |
+-------------------------+--------+------------------+
|Risk-related costs       |      10|              n.m.|
+-------------------------+--------+------------------+
|Equity affiliates        |     159|            +31.6%|
+-------------------------+--------+------------------+
|Net gain (loss) on       |     (5)|           (16.7%)|
|disposal of other assets |        |                  |
+-------------------------+--------+------------------+
|Pre-tax income           |   1,424|            +23.5%|
+-------------------------+--------+------------------+
|Tax                      |   (342)|            +39.1%|
+-------------------------+--------+------------------+
|Net income (Group share) |   1,043|            +21.0%|
+-------------------------+--------+------------------+
|Cost/income ratio        |   41.0%|         (2.5 pts)|
+-------------------------+--------+------------------+
|ROE                      |   18.6%|                  |
+-------------------------+--------+------------------+
*In 2005, before integration-related costs

** At constant exchange rates

In financing activities, the operating environment was positive overall, although there was constant pressure on margins. The return on risk-weighted assets remained firm due to increased business levels and faster portfolio turnover through active balance-sheet management. Operational and financial performance improved further in 2006.

Net banking income rose 14% to EUR 2,135 million. Financing activities have leading global positions: the structured financing business benefited from very strong commercial momentum, particularly in leveraged financing, real estate financing and international trade financing. The syndication business consolidated its top-10 position, arranging an increasing number of large deals. Commercial banking focused its development on international markets.

Operating expenses remained under tight control, rising by 7.3% in 2006. Gross operating income came in up 19.2% at EUR 1,260 million, while the cost/income ratio fell by 2.5 points to the very low level of 41%. Continuing favourable credit risk conditions resulted in a net reversal of provisions totalling EUR 10 million.

Net income (Group share) rose by 21% to EUR 1,043 million. After-tax ROE was 18.6%, 3 points higher than in 2005.

Capital markets and investment banking

+-------------------------+--------------------+--------------+---------------+
|In € millions            |Q4-06               |  Change Q4/Q4|  Change Q4/ Q3|
+-------------------------+--------------------+--------------+---------------+
|Net banking income       |                 809|        +13.6%|         +13.9%|
+-------------------------+--------------------+--------------+---------------+
|Operating expenses       |Gross operating     |         (640)|            169|
|                         |income*             |              |               |
+-------------------------+--------------------+--------------+---------------+
|Excluding regulatory     |Excluding regulatory|              |               |
|changes affecting        |changes affecting   |              |               |
|employee benefit         |employee benefit    |              |               |
|liabilities              |liabilities         |              |               |
+-------------------------+--------------------+--------------+---------------+
|                         |              +10.8%|        +12.6%|               |
+-------------------------+--------------------+--------------+---------------+
|Operating expenses       |Gross operating     |         (640)|            169|
|                         |income*             |              |               |
+-------------------------+--------------------+--------------+---------------+
|Excluding regulatory     |Excluding regulatory|              |               |
|changes affecting        |changes affecting   |              |               |
|employee benefit         |employee benefit    |              |               |
|liabilities              |liabilities         |              |               |
+-------------------------+--------------------+--------------+---------------+
|                         |              +24.0%|              |        +18.6% |
+-------------------------+--------------------+--------------+---------------+
|Risk-related costs       |                   -|          n.m.|           n.m.|
+-------------------------+--------------------+--------------+---------------+
|Equity affiliates        |                   -|          n.m.|           n.m |
+-------------------------+--------------------+--------------+---------------+
|Net gain (loss) on       |                   1|       (75.0%)|        (66.7%)|
|disposal of other assets |                    |              |               |
+-------------------------+--------------------+--------------+---------------+
|Pre-tax income           |                 170|        +19.4%|          +3.7%|
+-------------------------+--------------------+--------------+---------------+
|Tax                      |                (45)|        +17.9%|          +3.2%|
+-------------------------+--------------------+--------------+---------------+
|Net income (Group share) |                 121|        +20.8%|          +6.8%|
+-------------------------+--------------------+--------------+---------------+
|Cost/income ratio        |               79.1%|       + 1 pts|        + 2 pts|
+-------------------------+--------------------+--------------+---------------+
|ROE                      |                    |              |               |
+-------------------------+--------------------+--------------+---------------+

+-------------------------+--------+------------------+--------------------+
|In € millions            |   2006 |  Change 2006/2005|  Change 2006/2005**|
+-------------------------+--------+------------------+--------------------+
|Net banking income       |   3,321|            +28.6%|              +29.7%|
+-------------------------+--------+------------------+--------------------+
|Operating expenses       |  +14.7%|             +9.5%|              +16.5%|
|                         |        |                  |                    |
+-------------------------+--------+------------------+--------------------+
|Excluding regulatory     |        |                  |                    |
|changes affecting        |        |                  |                    |
|employee benefit         |        |                  |                    |
|liabilities              |        |                  |                    |
+-------------------------+--------+------------------+--------------------+
|                         |        |                  |              +51.6%|
+-------------------------+--------+------------------+--------------------+
|Operating expenses       |  +14.7%|             +9.5%|              +16.5%|
|                         |        |                  |                    |
+-------------------------+--------+------------------+--------------------+
|Excluding regulatory     |        |                  |                    |
|changes affecting        |        |                  |                    |
|employee benefit         |        |                  |                    |
|liabilities              |        |                  |                    |
+-------------------------+--------+------------------+--------------------+
|                         |        |                  |                    |
+-------------------------+--------+------------------+--------------------+
|Risk-related costs       |       -|              n.m.|                    |
+-------------------------+--------+------------------+--------------------+
|Equity affiliates        |       1|              n.m.|                    |
+-------------------------+--------+------------------+--------------------+
|Net gain (loss) on       |       -|              n.m.|                    |
|disposal of other assets |        |                  |                    |
+-------------------------+--------+------------------+--------------------+
|Pre-tax income           |     876|            +61.0%|                    |
+-------------------------+--------+------------------+--------------------+
|Tax                      |   (234)|            +76.2%|                    |
+-------------------------+--------+------------------+--------------------+
|Net income (Group share) |     613|            +56.9%|                    |
+-------------------------+--------+------------------+--------------------+
|Cost/income ratio        |   73.7%|         (3.7 pts)|                    |
+-------------------------+--------+------------------+--------------------+
|ROE                      |   26.4%|                  |                    |
+-------------------------+--------+------------------+--------------------+
*In 2005, before integration-related costs

** At constant exchange rates

In 2006, capital markets and investment banking generated net banking income of EUR 3,321 million, an increase of 28.6%. In line with the intended changes to Calyon's business mix, this segment's contribution to total corporate and investment banking revenues is increasing steadily, and was 60.9% in 2006.

In capital markets, there was excellent performance in interest-rate derivatives, strong growth in credit derivatives and collateralised debt obligations (CDOs) and further steady growth in equity derivatives, in line with the 2006-2008 development Plan.

2006 was a record year in brokerage, for both CA Cheuvreux and CLSA's equities business and Calyon Financial's listed derivatives business. These activities, which are not equity-intensive, provide excellent rates of return, revenues rose by 33% to record levels in 2006.

The investment banking segment completed some major deals, particularly in Europe, as well as strengthening its network by extending it further outside France.

Operating expenses increased by 22.4% to EUR 2,446 million. In addition to higher variable remuneration arising from strong business levels, this rise was due to significant investment aimed at enhancing capital markets IT systems and bolstering the workforce in all capital markets and investment banking activities.

Gross operating income increased by 49.5% to EUR 875 million, while the cost/income ratio fell by nearly 4 percentage points to 73.7%.

Net income (Group share) came in at EUR 613 million, a 56.9% increase on the 2005 figure. ROE stood at 26.4%.

6. PROPRIETARY ASSET MANAGEMENT AND OTHER ACTIVITIES

The contribution from proprietary asset management and other activities to net income (Group share) improved from -EUR 795 million in 2005 to -EUR 733 million in 2006.

Most of the improvement came from Private equity, where net banking income rose by 80.7%, from EUR 91 million in 2005 to EUR 165 million in 2006. This reflects firm business levels in all three segments: private equity, equity and long-term financing and corporate finance.

Operating expenses were flat, and so gross operating income rose by 114% to EUR 139 million. Similarly, the contribution to net income (Group share) jumped from EUR 59 million in 2005 to EUR 126 million in 2006.

Excluding the Private equity business, there was an increase in financial management revenues related to home purchase savings and investment portfolios. However, financing costs rose by EUR 148 million as a result of Crédit Agricole S.A.'s acquisitions, and there was a fall in income from ALM activities.

Income from equity affiliates rose by EUR 58 million, due to a sharp rise at listed equity interest Eurazeo.

+-------------------------+-------+--------------+--------------+---------+
|In € millions            |  Q4-06|  Change Q4/Q4|  Change Q4/Q3|   2006  |
+-------------------------+-------+--------------+--------------+---------+
|Net banking income       |  (166)|        (2.9%)|         x 2.2|    (255)|
+-------------------------+-------+--------------+--------------+---------+
|Operating expenses       |  (241)|         +3.7%|         +7.7%|    (844)|
+-------------------------+-------+--------------+--------------+---------+
|Gross operating income*  |  (407)|         +0.9%|        +35.9%|  (1,099)|
+-------------------------+-------+--------------+--------------+---------+
|Risk-related costs       |    (2)|          n.m.|          n.m.|       30|
+-------------------------+-------+--------------+--------------+---------+
|Equity affiliates        |      3|          n.m.|       (74.4%)|       89|
+-------------------------+-------+--------------+--------------+---------+
|Net gain (loss) on       |      9|          n.m.|          n.m.|       62|
|disposal of other assets |       |              |              |         |
+-------------------------+-------+--------------+--------------+---------+
|Pre-tax income           |  (397)|        (5.3%)|        +39.8%|    (915)|
+-------------------------+-------+--------------+--------------+---------+
|Net income (Group share) |  (307)|        +23.3%|        +53.1%|    (733)|
+-------------------------+-------+--------------+--------------+---------+
*Before integration-related costs

CRÉDIT AGRICOLE CONSOLIDATED RESULTS

In 2006, the Crédit Agricole Group generated net income (Group share) of EUR 7,154 million, an increase of 19.6% compared with 2005.

This growth was driven mainly by strong commercial momentum in all business lines. This led to a 12.4% rise in net banking income, while operating expenses increased by only 8.9%. As a result, gross operating income grew by 18.2% to EUR 11,342 million in 2006. Risk-related costs increased by 17.6%. Income from equity affiliates was up 29.1%.

Total shareholders' equity (Group share) was EUR 58.7billion at end-December 2006. The solvency ratio was 10.0%, with a Tier I ratio of 7.8%.

Crédit Agricole Group financial statements

* * *

Presentation available on the website: www.credit-agricole-sa.fr

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