Purchasing Principles

BNP Paribas is determined to be a benchmark banking group that considers the customer as its key consideration and actively pursues the improvement of its earning capacity.

Control of external expenses becomes essential to the Group's competitiveness. BNP Paribas' external expenses amounted to about 5 billion euros in 2004, i.e. over one third of the operating costs. Management of external expenses is therefore key to margins' improvement.

The Group's procurement policy aims to promote consolidation in order to reduce costs and to ensure that even the smallest entity benefits from the Group's buying power. It is in this context that GEO (Group Operational Efficiency) was created in September 2000. For products for which Group standards have been set (typically IT hardware and software), EOG negotiates contracts at the global level and the contracts' implementation is mandatory for all entities concerned.

BNP Paribas key principles and the development of the company's image must be reflected in supplier relations:

• BNP Paribas' commitment to ethics translates into strict supplier rules of conduct, as procurement involves interaction with the external business environment, and therefore is a particularly sensitive function.
• The reinforcement of risk management, following the Basel II framework endorsement, implies an improved suppliers' watch.
• The compliance of suppliers with sustainable development principles is a pillar of the BNP Paribas social and environmental policy, and is required for the Group in order to integrate ethical funds.