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���������ֳ�-London/Paris-22 October 2008: ���������ֳ� says well-established retail franchises and access to stable deposits have eased some of the liquidity strains on leading French banks since the onset of global financial market turmoil in August 2007. Furthermore the French government has demonstrated its commitment to the French banking system through capital injections to the nation's six largest banks this week. Yesterday ���������ֳ� affirmed the ratings of those banks, with a Stable Outlook (See announcement '���������ֳ� Affirms Six French Banks on Government Capital Injections', 21 October 2008). However, prospects for retail banking in France's mature and competitive market look increasingly challenging.

In a report published today, ���������ֳ� says home sales have fallen sharply and retail banks will no longer be able to count on buoyant housing loan demand to sustain strong retail banking development. Banks with well-established commercial banking activities outside of France may be better-positioned, although growth in central and eastern Europe and Russia, where investment has been sizeable, has slowed.

With the exception of Credit Mutuel group and La Banque Postale (LBP), all leading French banks have large investment-banking divisions and are exposed to volatile trading conditions and the need to adjust values on a wide range of structured asset portfolios. All large French banks also have a presence in the hard-hit asset management business.

Just as financial turmoil is creating opportunities for acquisitions, the crisis is also stimulating consolidation. On 8 October 2008, Groupe Caisse d'Epargne (GCE) and Groupe Banque Populaire (GBP) announced plans to merge, to create a group with equity in excess of EUR40bn and controlling an estimated 20% of retail deposits in France. GCE made swift senior management changes following the announcement of EUR600m of proprietary trading losses on 17 October 2008.

All large French banks which have published H108 figures reported a contraction in levels of operating income and profitability ratios have dropped sharply, with average operating return on average equity in H108 falling just short of 7% (H107: around 20%). Credit Agricole (CA), Societe Generale (SG) and Natixis have had to raise additional capital since the start of 2008. BNP Paribas (BNPP) has emerged as France's best performer and, on a stand-alone basis, the most highly rated French bank by ���������ֳ� (Individual rating: 'A/B'). Conservative management policies, illustrated by a lower risk appetite within its investment banking unit and a focused drive on expansion of retail-based activities, most recently with the acquisition of Fortis' retail banking activities in Luxembourg and Belgium, have paid off.

Since end-2007, ���������ֳ� has downgraded the Long-term (LT) Issuer Default Ratings (IDR) of four leading French banking groups: CA to 'AA-' (minus) from 'AA', GCE to 'A+' from 'AA-' (minus), SG to 'AA-' (minus) from 'AA' and LBP to 'AA-' (minus) from 'AA+'. As the French banking system is composed of large groups, many of which include subsidiary banks and financial companies which share the same, or notched, ratings, this means that a total of 12 French bank and financial company IDRs have been downgraded by ���������ֳ� since the onset of the credit crisis.

Individual ratings have also suffered, namely those of Natixis (latest downgrade to 'D' from 'C/D'), GCE and GBP (both to 'C' from 'B'), Calyon (to 'C' from 'B/C') and SG (to 'B' from 'A/B'). With the exception of LBP, where the downgrading of its Support-driven LT IDR was triggered by similar action taken on its shareholder's (La Poste) LT IDR, and SG, which suffered large fraud-related losses at the start of the year, all downgrades were directly linked to the fallout from the subprime crisis, combined, in the case of GCE and GBP, with downbeat prospects for domestic retail banking. The Outlooks for all LT IDRs of leading French banks are Stable but, given the current extreme market conditions, all banks are being closely monitored and further rating changes cannot be excluded.

The report, 'Major French banks - Semi Annual review and Outlook' is available on the agency's public website, .

GBP's ratings above are being maintained at ���������ֳ�'s initiative as a service to investors. The issuer did not participate in the rating process other than through the medium of its public disclosure.

Contact: Janine Dow, Paris, Tel: +33 (0)1 4429 9138; Eric Dupont, +33 (0)1 4429 9131.

Media Relations: Francoise Alos, Paris, Tel: +33 1 44 29 91 22, Email: francoise.alos@fitchratings.com; Julian Dennison, London, Tel: +44 020 7682 7480, Email: julian.dennison@fitchratings.com.