Annual Report 2006

Annual report 2006

Annual report 2006 6 0 0 2 T R O P E R L A U N N A

Executive Board -

y committee of directors r

a Philippe Gamba r b i

L Seated, from left to right: Standing, from left to right: Chairman of the board o t Patrice Cabrier Gery Saas Patrick Blain o h

P Senior V.P., Europe Senior V.P., Human Resources Patrice Cabrier n a

s Alain Dassas s i Jean-Pierre Framezelle Thierry Hébert

N Jean-Baptiste Duzan /

t Senior V.P., Sales Operations, Senior V.P., Enterprise Division l Jean-Pierre Framezelle u

a Diac Group n

e Michel Lucas Thierry Moulonguet R

- Philippe Gamba Senior V.P., International operations Gilbert Guez n i

n Chairman & Chief Executive Officer Honorary Chairman n

a Françoise Le Goff J s i Antoine Rousselin Senior V.P., Communication/Executive o ç

n Chief Financial Officer a Assistant

r Auditors F

: Deloitte & Associés Ernst and Young Audit s

t Philippe Lanson i d e

r Senior V.P., Organization and Information c o

t Systems o h P Frédéric Renaud Senior V.P., Credit Risk Eric Spielrein RCI Banque - S.A. with share capital of EUR 100,000,000 Senior V.P., Corporate Secretary Registered office: 14, avenue du Pavé-Neuf, 93168 Noisy-le-Grand Cedex - France Siren 306 523 358 RCS Bobigny Telephone: +33 1 49 32 69 99 - Fax: +33 1 49 32 86 15 - www.rcibanque.com

Annual report 2006

Annual report 2006 6 0 0 2 T R O P E R L A U N N A

Executive Board -

y committee of directors r

a Philippe Gamba r b i

L Seated, from left to right: Standing, from left to right: Chairman of the board o t Patrice Cabrier Gery Saas Patrick Blain o h

P Senior V.P., Europe Senior V.P., Human Resources Patrice Cabrier n a

s Alain Dassas s i Jean-Pierre Framezelle Thierry Hébert

N Jean-Baptiste Duzan /

t Senior V.P., Sales Operations, Senior V.P., Enterprise Division l Jean-Pierre Framezelle u

a Diac Group n

e Michel Lucas Thierry Moulonguet R

- Philippe Gamba Senior V.P., International operations Gilbert Guez n i

n Chairman & Chief Executive Officer Honorary Chairman n

a Françoise Le Goff J s i Antoine Rousselin Senior V.P., Communication/Executive o ç

n Chief Financial Officer a Assistant

r Auditors F

: Deloitte & Associés Ernst and Young Audit s

t Philippe Lanson i d e

r Senior V.P., Organization and Information c o

CI Banque provides sales As a captive finance company, the RCI financing for Renault Group Banque group offers a comprehensive Rbrands (Renault, Samsung and range of financing and related services Dacia) worldwide and for Nissan in most to three target customer segments: countries.

RCI Banque has operations in: • The Retail and Entreprise markets. • France; The RCI Banque group offers new and • fifteen other countries in Europe: used-car loans, rentals with options to Germany, Austria, buy, leases and long-term rentals. It Business report Belgium/Luxembourg, Croatia, Spain, also provides services to motorists such 2006 Hungary, Italy, Netherlands, Poland, as maintenance and extended Portugal, Czech Republic, United warranties, insurance and roadside Kingdom, Slovakia, Slovenia and assistance, and fleet management. Switzerland; • Renault and Nissan dealers. • the “Euromed” zone: The RCI Banque group finances Romania, Algeria, Morocco and Russia ; inventories of new cars, used cars and • the Americas: spare parts as well as short-term cash Argentina, Brazil, Colombia and Mexico ; requirements. • the Africa-Asia zone: South Korea. Management report 2006

1 Contents Key Figures

2-3 KEY FIGURES AND SIGNIFICANT EVENTS Total number of contracts in thousands

1,150 4-5 LETTER FROM THE CHAIRMAN 1,115 1,109 1,130 1,100

1,050

6 RESULTS 2006 1,018 1,000 1,012

950 7 OUTLOOK 2002 11,000 8-9 A CUSTOMER-ORIENTED 10,685 10,490 ORGANIZATION 10,500 10,373 10,000 9,873 10-11 RETAIL MARKET 9,500

9,000 9,229

12-13 ENTERPRISE MARKET 8,500 1,150 1,115 1,109 1,130 125,,10000 14-15 DEALER FINANCING 1,150 23,411 1,115 1,130 22,983 123,,050000 1,109 1,100 20,978 22,142 1,018 1,00021,000 1,012 16-17 RCI BANQUE 1,050

GROUP OPERATIONS 950 19,New000 lending19,123 1,018 1,000(including credit1,012 cards and personal loans) 17,in millions000 of euros 950 2002

18-21 FINANCIAL POLICY 11,15,000000 10,685 2002 10,500 10,490 11,000 10,373 23 MANAGEMENT 10,000 10,685 10,490 & HUMAN RESOURCES 10,500 9,873 10,373 9,500 10,000 9,873 9,000 9,229 25 VALUE UP 9,500 8,500 9,000 9,229

8,500 Net25,000 loans outstanding at year-end in millions of euros 23,411 22,983 23,000 25,000 20,978 22,142 21,000 23,411 22,983 23,000

19,000 129,1230,978 22,142 21,000

17,000 19,000 19,123 15,000 17,000

2 15,000 RCI BANQUE ANNUAL REPORT 2006 Significant events

As the financial partner to the Group’s brands, RCI Banque is a key component in the value chain, serving as an engine of growth and a builder of customer loyalty. RCI Banque increasingly follows a marketing integration strategy with Renault and Nissan in both Retail and Enterprise markets. The Dealer financing strategy is fully consistent with the car makers’ distribution policy.

nternationally, RCI Banque continues • In Poland, RCI Banque took 100% • In the Netherlands, the long-term leasing to expand alongside the Alliance. ownership of the Retail lending business, business was outsourced to ALD, while RCI I giving it full coverage of the country Banque entered this business in Croatia and • In Algeria, RCI Banque, under a through in-house credit solutions. In Poland in partnership with ALD and in commercial agreement with Cetelem, addition, RCI Banque and Nissan signed Hungary in partnership with Arval. started up Retail sales financing an agreement for customer and dealer operations for Renault and Dacia sales financing beginning 1 January 2007. CI Banque received an A– rating vehicles in December 2006. from FitchRatings (up from BBB+ • In Romania, an agreement was signed Rpreviously) and was therefore able • In Colombia, under a commercial with Société Générale for RCI Banque to to get refinancing on more competitive agreement, the commercial company take 100% ownership of the leasing terms. Note that RCI Banque now has three RCI Servicios Colombia S.A. began subsidiary. ratings (from Moody’s, Standard & Poor’s doing business in March 2006. and FitchRatings) that are each one step • In Russia, Renault and Nissan Retail higher than the parent company’s ratings. • In South Korea, RCI Banque’s wholly sales financing operations began under a owned finance subsidiary began commercial agreement with IMB CI Banque launched a private operations in March 2006. (UNICREDIT group). securitization by conduit and re-issued a public securitization • In Croatia, Retail lending under a • In Slovenia, the RCI Banque branch Rfollowing paydown of the Cars Alliance commercial agreement with ZABA Bank office established in October 2006 began Funding 2002-1 issue backed by Diac’s Retail began in January 2006. doing business in early 2007. customer receivables. I

3 Letter from the chairman

CI Banque, as the finance arm is an important contributor to difficult market conditions in Europe, this company for Renault Group operating income. effort positions us to increase our loan Rbrands worldwide and for Nissan outstandings thanks to fast-growing markets. in Europe and South America, now plays a Under the Renault Commitment 2009, central role in the Alliance’s sales and RCI Banque’s role is an essential one in Our second growth objective is in the marketing set-up. terms of growth, profitability and quality. product development area. We are to The value added by the brand’s finance emphasize development of loyalty- arm lies in making available to customers, In terms of growth, RCI Banque has been inducing products (balloon loans, leasing, at a single point of sale and in quick and given two objectives for expanding the car long-term rental) rather than conventional simple fashion, a full range of financing makers’ sales. The first is to accelerate our products. products and integrated services tailored to international development. From 21 their requests. countries in 2005, we widened our presence In addition, we continue to offer customers to 25 countries in 2006, and we can expect all-in-one solutions that combine financing, With its expertise, the finance arm brings to be doing business in some 30 countries insurance and service contracts. about improved customer loyalty, a faster by 2009. pace of trade-ins, more sales to new This is a winning strategy on two counts: it customers and more movement up the In 2006, we started up operations in Algeria, fuels profitable growth, and it builds model range. At the same time, the finance Colombia, Russia and Slovenia. At a time of customer loyalty. 4 RCI BANQUE ANNUAL REPORT 2006

In terms of earnings, RCI Banque was a this objective, RCI Banque counts inter heartily thank them for their involvement key contributor to Renault’s operating alia on the recognized quality of the and their effectiveness. income in 2006, with a record profit of finance product sales systems it provides to ?491m achieved in a market that was dealers, the effectiveness of its sales people Many other projects currently under way extremely competitive, especially in in the field, and the broad scope of its are set to materialize in 2007, enabling Europe. range of products and services. RCI Banque to be a full participant in Renault Commitment 2009. I We focused our efforts on maintaining a RCI Banque met its 2006 objectives by high level of competitiveness throughout improving profitability, stepping up the the business, particularly on our cost of pace of international development and funds – which we lowered by improving continuing its integration strategy with the the bank’s credit rating – as well as on our Group brands. PHILIPPE GAMBA cost of risk management and operating cost control. Taken together, the projects we undertook to meet these objectives involved every Lastly, in terms of quality of service, the employee of the RCI Banque group. bank should maintain its ranking among Without their commitment, these results the best brand finance arms. To achieve would not have been possible, and I must 5 Results 2006

Prudential capital in millions of euros 17.5%

2,500 2,305 25,000 2,222 2,250 1.95% 9.53% 15.5% 1.91% 23,136 1,934 22,887 2,000 9.50% 15.7% 15.1% 23,000 9.21% 1,640 8.85% 21,710 1,500 21,000 8.39% 1.76% 8.25% 19,898 8.12% 13.6% 7.99% 1,000 19,000 1.68% 18,288 1.63%

500 6.98% Equity 17,000 6.96% Solvency ratio

TIER I 0 (risk-weighted assets, 2006: 15,000 24,254 million e) Average loans outstanding Results & Overhead cost ratio in millions of euros in millions of euros

17.5% 17.5%

2,500 2,500 2,305 2,305 25,000 25,000 2,222 2,2502,222 2,250 1.95% 1.95% 9.53% 9.53% 15.5% 15.5% 1.91% 1.91% 23,136 23,136 1,934 1,934 22,887 22,887 2,000 2,000 9.50% 9.50% 15.7% 15.7% 15.1% 15.1% 23,000 23,000 9.21% 9.21% 1,640 1,6408.85% 8.85% 21,710 21,710 1,500 1,500 21,000 21,000 8.39% 8.39% 1.76% 1.76% 8.25% 8.25% 19,898 19,898 8.12% 8.12% 13.6% 13.6% 7.99% 7.99% 1,000 1,000 19,000 19,000 1.68% 1.68% 18,288 18,288 1.63% 1.63%

500 500 6.98% 6.98% 17,000 17,000 6.96% 6.96%

0 0 15,000 15,000

Pretax income Average performing loans outstanding

After-tax income Overhead cost ratio

ROE (excluding non-recurring items)

he RCI Banque group’s consolidated Net worth of the RCI Banque group refinancing, in particular through pretax income for 2006 was n491m, increased by n352m to n2,414m, owing securitization transactions. Securitized Tup 7.4% from 2005. mainly to the n305m of net income and a debt rose from 12% to 15% of total debt. The improvement was due mainly to: n60m increase in the fair value of Funds derived from medium-term and • 1.7% growth in net banking income over derivatives accounted for Cash Flow long-term instruments (maturing in more the year, resulting from a 1% increase in Hedge. than 1 year) were stable at 70%. average performing loans outstanding and a rise in the margin on services (to Net outstandings on RCI Banque group At 31 December 2006, the RCI Banque 0.72% of average performing loans sales finance contracts were n23bn at year- group’s solvency ratio was 9.5% (with outstanding, up from 0.59% in 2005); end 2006, down 1.8% from n23.4bn at TIER 1 at 8.4%), compared with 9.2% • a decline in the cost of risk (to 0.61% of year-end 2005. The decrease was notably (with TIER 1 at 8.1%) one year earlier. average outstandings, from 0.72% in due to the sale of the long-term leasing Excluding non-recurring items, ROE was 2005); portfolio in the Netherlands. A rise in 15.1% in 2006, compared with 15.5% in • controlled growth in distribution and outstandings in France and Spain was 2005. I general operating costs. offset in part by a reduced volume of Consolidated net income was n305m, business in Italy and Germany. compared with n311m in 2005, owing to In 2006 the RCI Banque group continued an increase in income tax expense. its policy of diversifying its sources of

6 RCI BANQUE ANNUAL REPORT 2006 Outlook

The two pillars of RCI Banque’s strategy are integration – into the sales and marketing efforts for the Alliance’s brands – and competitiveness. In this context, the use of sales financing as a marketing edge for the car manufacturers is proving ever more effective. RCI Banque enhances that advantage by adapting and tailoring its offerings to each customer segment: Retail, Enterprise and Dealer.

007 will see significant RCI Banque should, in 2007, begin developments in the international providing dealer financing in house and 2expansion of RCI Banque as part customer sales financing either under a of the strategic orientations adopted by the commercial agreement or through a joint Renault Group and in accordance with its venture. risk and return requirements. • In Slovakia, dealer financing operations • In the United Kingdom, RFS, are set to begin in 2007. currently operated as a joint venture, is set to become a wholly owned subsidiary This international growth strategy will in 2007. enable the RCI Banque Group to continue • In Morocco, the plan to set up a finance to augment its loan outstandings while affiliate will go forward using the meeting the profitability targets defined by partner’s systems and back offices. Retail the shareholder. lending is scheduled to begin in 2007, RCI Banque will pursue its efforts to with Dealer financing to follow. increase productivity, in particular by • In the Nordic countries, as part of the upgrading its management systems to Group’s marketing integration strategy, improve economic efficiency. I

7 A customer-oriented organization

s the captive finance subsidiary new markets as well as in Europe, RCI Integration for the Renault, Nissan, Samsung Banque continued its development of A and Dacia brands, RCI Banque is offerings that combine automobile and tasked with offering a full range of financing financing and insurance. In line with the and services in its three customer segments: “one-stop shopping” strategy, these joint projects Retail, Corporate and Dealer. package solutions meet customers’ needs to do a better job of managing their Customer expectations are not the same in automobile budget. Needs of this kind each of these segments. Each requires a have been taken into consideration from specific approach in terms of marketing, the beginning in the new countries where business methods, advertising, management RCI Banque has moved in to accompany processes and information systems. the car makers (Russia, South Korea, Algeria). To better take account of the specific attributes of each segment, RCI Banque For customers in the Enterprise segment, and the car makers work together closely RCI Banque works on both the financing on projects designed to improve sales side and the customer relations side. In effectiveness. every country where RCI Banque operates, For customers in the Retail segment, in the group’s objective is not only to offer a 8 RCI BANQUE ANNUAL REPORT 2006

full range of Enterprise financing solutions, SERVICES but also to team with the car maker on a C single sales approach to each customer. O R Customer P Marketing Sales RCI Banque’s penetration rate in Europe – Segment O 35.4% on new Renault and Nissan vehicles R sold – shows what such integration can A achieve and confirms the role of RCI T RETAIL FRANCE RETAIL Banque as a powerful lever in conquering E OFFERINGS SALES markets and winning customer loyalty for DIVISION D the Group’s brands. I I ENTERPRISE EUROPE V ENTERPRISES I OFFERINGS DIVISION S I O INTERNATIONAL DEALER N OPERATIONS DEALERS OFFERINGS S DIVISION (outside Europe) 9 Retail Market

The Retail lending business accounted for 54% of RCI Banque’s average performing loans outstanding, or n12.6bn. In 2006 RCI Banque wrote 439,295 loans to finance consumer purchases of new Renault Group and Nissan vehicles and 209,148 finance contracts for used vehicles.

Average performing his strong showing is attributable to In designing its offerings, RCI Banque loans outstanding RCI Banque’s integration into the listens closely to the needs expressed by the in millions of euros Tcar makers’ marketing and sales car makers’ customers. Customer concerns process, which enhances each brand’s ability about managing their automobile budget 13,000 to win over customers and cultivate their find a response in packages that combine 12,573 12,566 loyalty. Another contributing factor is that financing and insurance. “Use-oriented” 12,500 12,239 the group’s sales force provides Renault and products that allow the customer to change 2.05% 12,000 Nissan dealers with loan products and vehicles every two or three years now meet systems that enable customers to order, the demand of nearly one customer2% in 11,517 11,500 finance and, in most cases, insure their three. vehicle right at the dealership. This is a key 1.87% 11,026 1.79% 11,000 factor in closing a sale. RCI Banque supports the car makers as they expand internationally. In 2006 RCI 10,500 1.66% From time to time, the car makers also Banque began providing sales financing and 10,000 offer promotions that use financing as a insurance in Algeria for Renault, in Russia

marketing toolLoy altyto induce customersConventional to buy for both Renault and Nissan, and in South a specific makebuild oring model. Þnancing Korea for Renault Samsung Motors. I

10 RCI BANQUE ANNUAL REPORT 2006

Breakdown of consumer product range in Europe percentage 13,000

12,573 12,566 12,500 12,239 Product offerings are tailored to local 2.05% 12,000 conditions in each country and encompass: 2% 11,517 conventional financing products 11,500 for traditional customers, 1.87% 11,026 “use-oriented” or loyalty-building products (Renault 11,000 1.79% New Deal, Renault Selections, Minicuotas Nissan) for customers who want to budget for all-inclusive costs 10,500 while retaining freedom of choice during 1.66%

Nissan the term of the contract. 10,000 Renault

Loyalty Conventional building Þnancing

Net banking income – Pretax income Cost of risk Overhead cost ratio in millions of euros in millions of euros 13,000

12,573 12,566 12,500 12,239 2.05% 12,000 2% 11,517 11,13,500000 1.87% 11,026 12,573 12,566 11,12,050000 1.79% 12,239 2.05% 10,12,500000 2% 1.66% 11,517 10,00011,500 1.87% 11,026 Loyalty Conventional 11,000 building Þnancing 1.79%

10,500 1.66%

10,000

Loyalty Conventional building Þnancing Net banking income Pretax income Overhead cost ratio 11 Enterprise market

The Enterprise market covers all the products and services offered to business customers: credit, leasing, long-term rental and fleet management. Together, enterprise financing and fleet management make up a portfolio of 573,000 vehicles, with close to 479,400 vehicles on rental contracts. Of these, 61,230 are under fleet management contracts and 16,375 are under stand-alone contracts.

The market CUSTOMERS PRODUCT MICRO- LOCAL LARGE FLEETS FLEETS ACCOUNTS

verall, volumes in the Fleet mar- Credit ket rose only slightly during the

year. Long-term rentals grew Leasing O Rental faster than in 2005, especially in the first offerings half of 2006 when the number of additional Long-term rental vehicles put in service increased by 6%. In contrast, volumes in fleet management Fleet management decreased by 7.5% in the first half. The largest markets are Germany, Spain, France and the United Kingdom. Growth prospects are best in the countries of companies represent a small circle of custo- financing business. Companies in this Central and Eastern Europe, where lending mers with sophisticated needs in terms of segment can choose between credit, lea- to corporate customers – specifically for services and management information sing and long-term rental as the method long-term vehicle rentals – is still fairly new. systems. to finance their fleets. I

• Long-term rental is the prime form of • The greatest potential in terms of vehicle fleet financing adopted by large com- volume is in the local fleet segment, panies. The large-company market is mature, made up of very small, small and mid- and competition among financing compa- sized companies. This segment is the nies is fierce. In this market, multinational main growth area for the Enterprise 12 RCI BANQUE ANNUAL REPORT 2006

RCI: An integrated approach with the car makers

o respond to market conditions, Enterprise financing solutions (credit, leasing As part of this plan, the Renault Business meet the needs of Enterprise or long-term rental). In synergy with Renault, Solutions program has been deployed in four Tcustomers, and reach the economic a segment-specific sales approach has been countries via shared support organizations. targets set by its shareholder, RCI Banque is deployed for Enterprise customers. To offer a full range of finance contracts, pursuing closer integration with Renault and RCI Banque has entered into partnerships Nissan. For RCI Banque, the Renault and A shared strategic view out to 2009 has been with long-term renters in some European Nissan dealers in Europe represent an projected for developing business in local fleet markets, including Central and Eastern extension of its sales force, giving it an financing and consolidating positions in Europe, in order to meet the demand from undeniable competitive edge that is enhanced financing for large corporate accounts. The enterprises operating in the local market. I by the growth prospects in the small and mid- goal of this strategy is to improve the sized company segment. performance of Renault and RCI Banque in the Enterprise market by focusing especially In every country where RCI Banque operates, on the international dimensions of the the objective is to offer a full range of business.

Average performing Net banking income – Pretax income loans outstanding Overhead cost ratio Cost of risk in millions of euros in millions of euros 6,000 in millions of euros 3.11% 5,158 5,000 6,0006,000 5,004 3.11%3.11% 4,241 5,158 5,0045,0045,158 4,000 5,0005,000 3,782 2.64% 4,2414,241 3,000 4,0004,000 3,7823,782 2.64%2.64% 2.27% 2,183 2,000 3,0003,000 2.27%2.27%1.95% 2,1832,183 1,000 2,0002,000 1.98% 1.95%1.95% 1.98% 0 1,0001,000 1.98%

0 0

Net banking income Overhead cost ratio

Pretax income

Accomplishments and outlook

n 2006, in a more difficult automobile portfolio in countries where RCI Banque countries. The strategy for the long-term market, the number of new finance has enterprise offerings. The number of rental business will be pursued primarily by I contracts written remained at the level on-contract vehicles under fleet providing solutions tailored to potentials in of the year before. In Western Europe, the management declined by 4.7% from 2005 each local market. Synergies between rental portfolio comprised 479,400 as large operators, in particular some Renault and RCI Banque in service vehicles, 232,500 of them on long-term government entities, rationalized their contracts and warranties will be exploited rental. The fleets under management in fleets. In 2007, Renault Business Solutions further. I France represent 48.5% of the total rental will be adapted and deployed in other 13 Dealer Average performing loans outstanding in millions of euros

5,600

Financing 5,412 5,400 5,310 5,230 5,200 0.64% 5,089 5,000 0.62%

0.61% 4,800

4,600 4,588 0.58% 0.57% 4,400

4,200

4,000

n 2006 RCI Banque focused its strategic • Operational guidance of the business • Following Nissan organizational changes directions in the Dealer Financing using concerted action plans to achieve in Europe and its Regional Business Unit I business on: widespread adoption of standards and and “Shift_Germany” programs. methods. • Undertaking pilot studies for future • Assisting the car makers in effecting • Introduction of a new ratings-based business operations in Morocco, Slovakia financial consolidation of the dealer approach in the processes for risk- and the Baltic countries. networks for their brands, weighting credit assets (in France, • Undertaking planning projects for • Supporting their sales by providing Germany, Italy, and Spain) that meets operations in the Scandinavian countries suitable financing products and moving the bank regulatory requirements of the and Russia in support of the ongoing with them into new markets, Basel II agreement. international deployment of Alliance • Mastering the key processes in risk • Validation of a uniform provisioning brands. I management and procedures, process. • Implementing shared solutions through a • Use of a single management system tool management system tool offering to implement standardized shared standardized functionalities. functionalities.

At the same time, and in line with its practice Notable accomplishments in 2006 include: in previous years, RCI Banque strengthened • Implementation of Dealer financing in its risk monitoring system in several ways: Slovenia, effective 1 January 2007.

14 RCI BANQUE ANNUAL REPORT 2006

Net banking income – Pretax income Cost of risk Overhead cost ratio in millions of euros 5,600 5,600 in millions of euros

5,412 5,412 5,400 5,400 5,310 5,310 5,230 5,230 5,200 5,200 0.64% 0.64% 5,089 5,089 5,000 5,000 0.62% 0.62%

0.61% 0.61% 4,800 4,800

4,600 4,588 4,600 4,588 0.58% 0.58% 0.57% 0.57% 4,400 4,400

4,200 4,200 Net banking income Pretax income 4,000 4,000 Overhead cost ratio

Growth in average performing loans outstanding by country

2005 2006

7% 7% 7% 7% 1% 1% UnitedUnit Kingdomed Kingdom UnitedUn Kiitengdomd KingdomSwitzerlandSwitzerland 1% 1% SwitzeSwirlandtzerland 1% 1% 2% 2% 2% 2% Other Other* PortugalPortugal 1% 1% PortugalPortugal 1% 1% 4% 4% Other*Other 5% 5% PolandPoland NetherNlanetherds lands 21% 21% NetherlNandsetherlands 18% 18% GermaGermany ny GermanyGermany

7% 7% 7% 7% 2% 2% Italy Italy 2% 2% Italy Italy AustriaAustria AustriaAustria 2% 2% 2% 2% BelgiumBelgium BelgiumBelgium 1% 1% 2% 2% Brazil Brazil Brazil Brazil

14% 14% 15% 15% 38% 38% Spain Spain 37% 37% Spain Spain FranceFrance FranceFrance

* Other: Argentina, Hungary, Czech Republic.

15 RCI Banque Group Operations

n 2006, a transition year for the Renault of the three brands – Renault, Dacia and units in the thirteen European countries Group, worldwide sales were down 4% Samsung – contributed to this growth. where the RCI Banque group provides Ito 2,433,604 vehicles. sales financing for Nissan, giving it a In the highly competitive French and market share of 1.8%. Outside Europe, sales were up 8.8%, European markets, the lack of new models thanks in particular to the Logan, good and the stepped-up selectivity of the In terms of loan production, the RCI performance by Renault Samsung Motors Renault Group’s commercial policy led to Banque group wrote 946,036 vehicle and growth in Renault brand sales in an 8.7% decrease in sales to 1,691,585 finance contracts in 2006. Of these, 12.3% international markets. At year-end 2006, units. This was accompanied, however, by (116,480) were written outside Western sales outside Europe represented more a significant increase in the residual value Europe. than 30% of the Renault Group total. Each of vehicles. Nissan sales came to 346,816

Market share Number of Nissan market RCI Banque PC + LUV market* Renault Group contracts share (%) penetration rate (%) brands (%)*** processed

Western Europe 2006 9.9% 2.2% 34.0% 829,556 2005 10.9% 2.4% 34.9% 929,400 Germany 2006 4.7% 1.6% 40.1% 154,504 2005 5.3% 1.6% 47.0% 185,190 Spain 2006 10.8% 3.2% 45.9% 140,929 2005 12.4% 3.6% 43.7% 154,713 France 2006 26.3% 1.7% 32.1% 287,829 2005 27.2% 2.0% 32.5% 307,855 United Kingdom 2006 6.0% 3.2% 29.1% 108,041 2005 7.1% 3.7% 26.4% 116,708 Italy 2006 5.6% 1.9% 32.7% 68,117 2005 6.6% 2.2% 35.8% 86,112 Brazil 2006 2.8% 0.3% 38.3% 27,502 2005 2.9% 0.5% 50.8% 31,977 South Korea** 2006 10.0% 0.1% 12.7% 15,360 2005 - - - - Rest of world**** 2006 16.3% 0.4% 29.2% 73,618 2005 17.5% 0.4% 30.4% 75,273 2006 9.7% 1.8% 32.4% 946,036 Total RCI 2005 10.7% 2.1% 34.8% 1,036,650

* Data are for passenger cars (PC) and light utility vehicles (LUV). ** 2006: consolidation of South Korean subsidiary. *** 2005: pro forma with Renault and Dacia. 16 **** Rest of world: Poland, Czech Republic, Slovakia, Hungary, Romania and Argentina. RCI BANQUE ANNUAL REPORT 2006

Amid more difficult market conditions for compared with n23.4bn at year-end 2005. the automobile industry, new financings by The 1.8% drop is largely attributable to a the RCI Banque group declined to n9.7bn decrease in Dealer outstandings and the in 2006, down 5.8% from the same period sale of the long-term rental portfolio in the in 2005. RCI Banque nevertheless Netherlands. maintained a satisfactory 34% penetration A rise in outstandings in France and Spain rate on sales of new Renault and Nissan was offset in part by a reduced volume of vehicles in Western Europe (compared business in Italy and Germany. I with 34.9% in 2005). Net customer and dealer loans outstanding stood at n23bn at year-end 2006,

Net loans Average performing Net banking New financings outstanding Dealer loans Pretax income PC + LUV market* loans outstanding income (in millions of euros) at year-end (in millions of euros) (in millions of euros) (in millions of euros) (in millions of euros) (in millions of euros) Total Western Europe 2006 9,077 21,935 5,013 22,240 894 439 2005 10,055 22,824 5,314 22,376 906 412 Germany 2006 1,690 4,795 887 4,960 192 95 2005 1,941 5,266 1,129 5,206 207 86 Spain 2006 1,735 3,802 741 3,800 141 73 2005 1,949 3,849 853 3,527 134 60 France 2006 3,380 7,807 1,984 7,687 329 163 2005 3,568 7,687 1,978 7,493 321 140 United Kingdom 2006 868 1,776 362 1,811 69 35 2005 928 1,795 323 1,853 82 56 Italy 2006 718 1,962 395 2,096 85 41 2005 881 2,264 403 2,396 95 46 Brazil 2006 241 371 100 353 35 19 2005 132 196 57 171 18 9 South Korea** 2006 183 141 - 55 6 -1 2005 ------Rest of world**** 2006 235 536 137 487 41 22 2005 155 390 109 338 37 23 2006 9,737 22,983 5,250 23,136 1,019 491 Total RCI 2005 10,342 23,411 5,480 22,887 1002 457

17 Financial policy

In 2006 RCI Banque continued its policy of diversifying its sources of funds and increasing the amounts obtained through securitization.

fter amortizing the first series in for this issue, and the FCC that was set up the group’s securitization pro- distributes its securities directly to inves- A gram, launched in 2002 and tors. backed by the loan portfolio of its Diac As in the past, this transaction was based on subsidiary in France, RCI Banque placed a a sale of a whole asset class. The amount new issue in 2006. With eligibility criteria securitized therefore varies monthly. It is refi- now permitting unlimited amounts of bal- nanced by a public medium-term issue and loon loans to be included, the group was by monthly short-term issues in the form of able to raise the amount of the medium- private placements. term note issue to ?1.8bn. The structure A securitization of dealer outstandings in of the new issue has also taken advantage of Germany was also put in place with a ceiling France’s new securitization law, which now of n470m on external financing. allows French securitization funds (FCCs) The proportion of new funds obtained to issue notes, which international inves- through securitization thus increased from tors accept more readily than the FCC 12% to 15% of the group total during units that could be issued under the pre- 2006. I vious law. Accordingly, the Irish vehicle that had been used in the past was not used

18 RCI BANQUE ANNUAL REPORT 2006

General structure of RCI Banque’s pan-European securitization program

RNC Spa Purchase price Alliance Auto Loans Notes 2002-1 (Italian subsidiary) Notes 2003-1 (medium term) retail sales Italy n1,400 M financing Auto loans (Italian SPV) Short-term revolving Notes Cars Alliance Funding (Irlande)

Cogera Purchase price Alliance DFP Notes 2005-1 (medium term) (issuer) (French subsidiary) Notes 2005-1 dealer loans France n850 M Auto loans (FCC) Short-term revolving Notes

Diac Purchase price Car Alliance Auto Notes 2006-1 (medium term) (French subsidiary) Loans France retail sales financing Auto loans (FCC) Short-term revolving Notes

Purchase price Medium-term Notes RCI Car Alliance Auto Banque Loans country 4 Affiliate 4 Auto loans Short-term revolving Notes 19 Financial policy

FitchRatings upgraded the group’s long-term debt from BBB+ to A- in July therefore confirming the single-A credit rating now granted by all three rating agencies.

otwithstanding the decrease in collareral), nearly twice the combined total began operations in March 2006, benefited financing requirements under value of commercial paper and certificates from a refinancing on highly competitive Nthe EMTN program resulting of deposit outstanding. terms. from securitization transactions, and also In Argentina, a note issuance program was despite the slight decrease in loan As a matter of group policy, assets outside set up in 2006 to provide a secure basis for outstandings, such confirmation allowed Western Europe held in countries rated less growth in customer lending and diversify RCI Banque to pursue its efforts to than single-A are financed by sources of the refinancing by tapping local capital diversify the placing of its debt and thereby funds borrowed locally in the same markets. Two issues were made for a total reduce its dependence on French investors. currency. In this context, RCI Banque of ARS 70m, which represented about During 2006, the group launched a five- maintained its central role in refinancing one-third of local financing requirements year, n400m public issue and eleven private for the subsidiaries in Western Europe, at year-end 2006. I issues for a total of n1,820m. enabling it to optimize the cost of funds and enhance the services it provides in Liquidity reserves totalled ?7,205m areas such as back-office processing, (?5,378m in confirmed lines of credit, up transaction accounting and financial risk slightly from 31 December 2005, and management. ?1,827m in cash and ECB eligible The subsidiary in South Korea, which

RCI Banque - breakdown of liabilities and equity RCI Banque - breakdown of liabilities and equity in millions of euros percentage

27,500 27,500

25,000 25,000 100 27,500 100

25,000 100 22,500 22,500 27,500 90 90 25,000 22,500 100 90 20,000 20,000 22,500 20,000 80 90 80 80

20,000 17,500 80 70 17,500 27,500 17,500 27,500 70 70 17,500 15,000 70 60 25,000 100 25,000 100

15,000 12,500 60 50 15,000 22,500 15,000 90 22,500 60 60 90

12,500 10,000 50 40 20,000 80 20,000 80 12,500 12,500 50 50 10,000 7,500 40 30 17,500 70 17,500 70

7,500 5,000 30 20 10,000 15,000 10,000 60 15,000 40 40 60 5,000 2,500 20 10 12,500 50 12,500 50 7,500 30 7,500 2,500 0 30 10 0 10,000 40 10,000 40

0 0 5,000 7,500 5,000 30 7,500 20 20 30 5,000 20 5,000 20 10 2,500 2,500 2,500 10 2,500 10 10

0 0 0 0 0 0 0 0

Renault Group Bond securitization Short term

Money market & partners Long-term (bonds, MTN, IB, SS) Long term

Commercial Paper Equity

20 RCI BANQUE ANNUAL REPORT 2006 Estimated breakdown of borrowings maturing in more than one year issued in 2006

By country By products

23% 23% Germany andGerma Ausnytria and Austria 13% 13% 5% 5% Money marketMoney market Northern Northern Europe Europe

3% 3% BMTN and CDBMTN and CD 36% 36% 8% 8% EMTN – publicEMTN – public Benelux Benelux and privateand private 2% 2% 27% 27% Other Other France France 5% 5% Spain Spain and Portugaland Portugal 45% 45% SecuritizationSecuritization

3% 3% SchuldscheinSchuldschein 2% 2%27% 27% Italy ItalyGreat BritainGreat Britain and Irelandand Ireland

The group’s programs are concentrated on two issuers (RCI Banque, Diac) and represent aggregate borrowing of over 24 billion.

AMOUNT ISSUER PROGRAM MARKET in millions S & P MOODY’S FITCH R & I RCI Banque Euro CP euro EUR 2,000 A2 P2 F2 a1

RCI Banque Euro MTN euro EUR 12,000 A- A3 A- A

RCI Banque CD French EUR 4,000 A2 P2 F2

RCI Banque BMTN French EUR 2,000 A- A3 A-

Diac CD French EUR 1,500 A2 P2 F2

Diac BMTN French EUR 1,500 A- A3 A-

RCI Banque CP US USD 1,000 A2 P2 F2

RCI Banque + Overlease + Renault AutoFin CP Belgian EUR 500 A2 P2 F2 (RCI guarantee)

21 Management & human resources

RCI Banque’s strategy is based on having well-suited management (achieved by international career mobility, training and development of managerial capabilities, and skills requirement forecasting), high-performance information systems (new technologies, speed and responsiveness) and unrelenting process improvement.

Skills requirement forecasting

ince 1 January 2001, as part of its The goals are twofold: requirements. This will improve current human resources (HR) policy, the • at the group level, to improve awareness employees’ performance while enhan- RCI Banque group has incorporated of the competencies available within the cing their ability to move into another Sa Skills Forecasting Management approach group in order to optimize HR planning position. that it first implemented in France and (training, mobility and recruitment) The challenge is to more accurately match then gradually extended to the group’s and thereby target career paths more employee skills with the company’s requi- foreign subsidiaries. effectively, rements. I This approach provides a shared career • at the individual level, to enable all management tool accessible to everyone employees and their superiors to evaluate involved: supervisors, employees, HR individual skills more objectively, thereby functions in the group. identifying each staff member’s training

International career mobility

nternational career mobility is one of • to take advantage of the wealth of cultural career paths. RCI Banque’s clearly stated goals as it diversity and competencies among the To meet these goals, RCI Banque has defi- I expands alongside Renault and Nissan group’s managers by offering them a ned three main focuses: throughout the world. variety of career development paths that • identifying, selecting and closely The group’s commitment to this goal is will enable them to develop their poten- monitoring the careers of international manifested in a statement of policy on tial to the fullest, managers and executives, international mobility. The policy • to apply the same management principles • offering career guidance to managers statement sets down the guiding principles to all of the group’s subsidiaries by who want to acquire experience outside and strategic orientations of the group’s setting up uniform competency their country of origin, international dimension as they pertain to assessment methods, performance • promoting the recruitment of young staff, human resources. recognition programs and identification in particular through the “Volontaires of positions with an international Internationaux en Entreprise” (Corporate The objectives of international career dimension, so as to manage geographic International Volunteers) program. I mobility are twofold: mobility effectively and offer rewarding

Management training and development

CI Banque continues to invest modules are available in subjects ranging development and are fully equipped with in training and in enhancing from languages and office IT systems to the technical and educational tools needed R managerial competencies: The financing products, financial analysis and to offer optimal training conditions and to Group spent over 5% of its payroll on training other management tools. encourage mentoring. I in 2006. RCI Banque develops and In addition to online training, RCI Banque deploys new training technologies, such as has opened resource centers at its main self-training via intranet. Self-training offices. These centers are dedicated to skills 22 RCI BANQUE ANNUAL REPORT 2006

Value Up

from process improvement to operational performance

n late 2001 RCI Banque launched a For each process, an owner of that process • quickly establish a systematic, progress- process improvement program named has been designated. As the program is gra- oriented approach, I “Value Up” as part of its growth and dually deployed, the process owner will be • optimize each employee’s contribution competitiveness strategy. The program responsible for establishing indicators and to the company’s development, puts cross-functional teams on projects monitoring improvement in terms of cus- • speed achievement of enterprise-wide focused on key processes with high poten- tomer satisfaction, operating performance objectives. tial for improvement. It draws on Lean and risk, using the Value Up methods and Management and Six Sigma techniques. tools. Groupwide, some 230 staff have been given intensive training, and 600 people By 2005, the program had matured to the This customer-oriented process improve- have been involved in the program. I point that it could be deployed more gene- ment approach enables the RCI Banque rally to improve operational performance group to: by managing the underlying processes. A • strengthen the culture and practice of process map has been drawn up to provide accountability, a structured description of every activity of • strengthen its customer-focused culture all RCI Banque entities. and put the client’s needs first, 23 BUSINESS REPORT 2006

RCI BANQUE GROUP OPERATIONS WESTERN EUROPE EASTERN & CENTRAL EUROPE MERCOSUR ASIA

INTERNAL CONTROL & FINANCIAL SECURITY

REPORT OF THE STATUTORY AUDITORS

RISKS

MANAGEMENT REPORT 2006

AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED FINANCIAL STATEMENTS RCI BANQUE GROUP

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

GENERAL INFORMATION ON RCI BANQUE

GENERAL INFORMATION

LEGAL INFORMATION

PERSON IN CHARGE OF ANNUAL REPORT

Annual report 2006

Annual report 2006 6 0 0 2 T R O P E R L A U N N A

Executive Board -

y committee of directors r

a Philippe Gamba r b i

L Seated, from left to right: Standing, from left to right: Chairman of the board o t Patrice Cabrier Gery Saas Patrick Blain o h

P Senior V.P., Europe Senior V.P., Human Resources Patrice Cabrier n a

s Alain Dassas s i Jean-Pierre Framezelle Thierry Hébert

N Jean-Baptiste Duzan /

t Senior V.P., Sales Operations, Senior V.P., Enterprise Division l Jean-Pierre Framezelle u

a Diac Group n

e Michel Lucas Thierry Moulonguet R

- Philippe Gamba Senior V.P., International operations Gilbert Guez n i

n Chairman & Chief Executive Officer Honorary Chairman n

a Françoise Le Goff J s i Antoine Rousselin Senior V.P., Communication/Executive o ç

n Chief Financial Officer a Assistant

r Auditors F

: Deloitte & Associés Ernst and Young Audit s

t Philippe Lanson i d e

r Senior V.P., Organization and Information c o

Content

2-19 RCI BANQUE GROUP OPERATIONS 2- WESTERN EUROPE 13- EASTERN & CENTRAL EUROPE 17- MERCOSUR 19- ASIA

20-27 INTERNAL CONTROL & FINANCIAL SECURITY

28 AUDITORS’ REPORTS

29-36 RISKS WESTERN EUROPE

Germany

he German economy seems to be embarked on a lasting The more selective underwriting policy and improvements in the recovery. GDP growth in 2006 was close to 2.5%, led by recovery process lowered the overall cost of risk to ?38.5m in 2006, exports and a pickup in domestic demand boosted by compared with ?55.4m in 2005. Tanticipation of the increase in VAT. The index of business confidence Unremitting efforts to control costs held net operating expenses to is at its highest level in fifteen years, and the situation in the labor ?58m. market is improving. Pretax income after nonrecurring charges came to ?95m in 2006, up from ?86m in 2005. In the automobile market, all brands combined, sales increased by 4.3% to 3.7 million vehicles. Renault’s market share slipped to 4.5%. Nissan held its share at 1.6% following a reorientation of its sales strategy. Dacia’s market share increased thanks to the success of the Logan model. in thousands of euros 2006 2005 RCI Banque Germany’s penetration rate was 40.1% compared with Number of contracts processed 154,504 185,190 47% in 2005. The decline was a consequence of the cutback in New financings 1,690,472 1,940,980 promotional campaigns by the car makers, increased competition, and more selective underwriting by RCI Banque. A nationwide BALANCE SHEET campaign (Leicht und sicher) during the last four months of 2006 Gross outstandings 4,917,439 5,402,751 raised new financings for the year to n1,690m. Allowance for impairment (122,836) (137,072) In this adverse environment, RCI Germany pressed ahead with the three-pronged recovery plan implemented in 2005 to reduce its Net outstandings 4,794,603 5,265,679 operating expenses, control its cost of risk, and develop new products of which receivable from dealers 886,632 1,129,464 and services. Available-for-sale securities 101,791 39,695 Other assets 80,544 104,600 Average performing loan outstandings declined by 4.7%, primarily Debt 4,578,902 5,043,173 owing to a 9.3% decrease in dealer outstandings. Other liabilities 72,075 56,058 Net banking income declined from 2207m in 2005 to n192m in Provisions 6,071 10,429 2006. The decline was attributable to the following factors: Equity 319,890 300,314 • the decrease in leasing business prompted by anticipation of the VAT increase; Balance sheet total 4,976,938 5,409,974 • the recognition of a charge for impairment of residual value following Nissan’s reorganization of its dealer network; INCOME STATEMENT • a rise in income from other products and services, notably thanks Net banking income 191,669 207,459 to the improvement of insurance products, which offset part of the (excluding non-banking income) decline in net banking income. Pretax income 95,116 85,834 RCI Germany contributed to diversification of the group’s sources Net income 53,528 61,993 of funds in 2006 by carrying out a conduit securitization.

RCI BANQUE S.A. – Niederlassung Deutschland Jagenbergstrasse 1-D – 41468 Neuss – GERMANY Management: Alain JUAN – Tel.: +49 2131 401 010

2 RCI BANQUE BUSINESS REPORT 2006

Austria

conomic conditions in Austria improved in 2006. Inflation was brought down to 1.4%, from 2.3% in 2005, and the in thousands of euros 2006 2005 national automobile market was steady (up 0.7%). New Number of contracts processed 13,243 13,605 Evehicle registrations for Alliance brands (Renault, Dacia and Nissan) New financings 94,462 106,883 declined by 3.4% from 2005. BALANCE SHEET Renault’s market share came in at 5.9%, compared with 6.5% in Gross outstandings 294,251 289,978 2005. The launch of the Dacia brand partly offset the slide. Nissan Allowance for impairment (6,526) (5,893) saw its market share rise to 1.9%, from 1.8% in 2005. Net outstandings 287,725 284,085 Despite a reorientation of the car makers’ contributions, the number of which receivable from dealers 100,383 102,566 of new finance contracts came to 13,243, versus 13,605 in 2005. Available-for-sale securities 4,825 2,978 Other assets 2,345 2,036 Increases in contracts in the Enterprise (up 13%) and used car (up Debt 253,220 249,745 10%) markets made up for the 23% decrease in new vehicle contracts in the Retail market. Other liabilities 5,172 4,325 Provisions 719 639 Buoyed by competitive offerings and a partnership on financing of Equity 35,784 34,390 long-term rentals, the Enterprise business processed over 1,000 new Balance sheet total 294,895 289,099 contracts. INCOME STATEMENT Average performing loan outstandings rose to ?291m in 2006, up Net banking income 11,937 11,587 5.6% from 2005, on the back of a 9% rise in Customer loan (excluding non-banking income) outstandings. Average performing Dealer loan outstandings were Pretax income 5,888 6,023 stable at ?107m. Net income 4,394 4,599 Pretax income was ?5.9m, close to its level in 2005 (?6m), thanks to effective cost control. As a percentage of outstandings, cost of risk was 0.36% (0.31% in 2005), and operating expenses were 1.72% (1.71% in 2005).

RCI BANK AG – Laaer Berg Strasse 64, Postfach 196 A-1101 Vienna – AUSTRIA Management: Manfred HEINDL – Tel.: +43 1 680 30-0

3 Belgium

elgium’s competitive automobile market grew by 7.9% in 2006, with 641,118 new vehicle registrations for the year. in thousands of euros 2006 2005 Renault’s market share came in at 10.3%, down from 11.4% Number of contracts processed 13,287 16,535 Bin 2005. New financings 97,497 118,233

In this context, RCI Belgium’s penetration rate was 18.3%, BALANCE SHEET compared with 22.6% in 2005. New financings amounted to ?97.5m, down 17.5% from ?118.2m in 2005. Gross outstandings 331,187 342,789 Allowance for impairment (8,268) (8,085) Average performing loan outstandings came to ?339m, a slight Net outstandings 322,919 334,705 increase over 2005 (up 0.9%). Net banking income declined by 1.8% of which receivable from dealers 120,987 104,423 to ?9.1m, owing largely to recognition of impairment on residual Available-for-sale securities 4,120 1,162 values due to deterioration in the used vehicle market. Other assets 37,223 36,792 Debt 328,132 343,603 Pretax income was ?2.6m, up sharply from 2005 (?0.7m), thanks to containment of cost of risk and operating expenses. Other liabilities 21,303 15,635 Provisions 1,141 1,511 Equity 13,686 11,910 Balance sheet total 364,262 372,659

INCOME STATEMENT Net banking income 9,136 9,308 (excluding non-banking income) Pretax income 2,642 715 Net income 1,775 (411)

RCI Financial Services S.A. – W.A. Mozartlaan, 8 1620 Drogenbos – BELGIUM Management: Fabrizio RUGGIERO – Tel.: +32 2 730 19 11

4 RCI BANQUE BUSINESS REPORT 2006

Spain

he automobile market in Spain maintained the pace it set in 2005, with new vehicle sales, all brands combined, of 1.9m in thousands of euros 2006 2005 in 2006. For the Alliance car makers, the picture was mixed: Number of contracts processed 140,929 154,713 TRenault fell to second place, with a market share of 10.5% (down New financings 1,735,318 1,948,870 1.9%), Nissan’s share slipped to 3.2%, while Dacia, in its second year on the market, took a 0.3% share. The Alliance suffered from the BALANCE SHEET inroads made by Asian car markets, especially Toyota. Gross outstandings 3,906,894 3,947,574 Allowance for impairment (105,364) (98,445) In this context, RCI Spain posted an increase in its penetration rate on Renault sales to 49.5%, up 4.5 points from 2005. This sales Net outstandings 3,801,530 3,849,129 performance was attributable to close collaboration with the car of which receivable from dealers 741,168 852,674 maker to provide customers with attractive offers, such as a discount Available-for-sale securities 6,457 8,836 on the price of a vehicle when the buyer signs up for a Multiestreno Other assets 96,171 147,314 financing product. Penetration rates on Nissan and Dacia sales Debt 3,447,083 3,533,588 slipped to 35% and 35.1% respectively. Financing of Nissan sales was contrasted during the year. A zero-interest promotion during the Other liabilities 124,734 152,111 first half produced satisfactory results, whereas the offerings in the Provisions 10,017 10,545 second half met with a lukewarm reception. Equity 322,324 309,035 Balance sheet total 3,904,158 4,005,279 Sales efforts for used vehicle financing were cut back, leading to a 9.6 points decline in business from 2005 to 18,609 contracts written. INCOME STATEMENT New financings fell by 11% to ?1.7bn. Average performing loan outstandings came to ?3.8bn, up 7.7% Net banking income) 141,369 133,553 (excluding non-banking income) from 2005. Pretax income 73,302 60,393 Pretax income was ?73.3m, compared with ?60.4m in 2005. The Net income 47,513 44,675 rise was attributable to the increase in outstandings and higher income from services, led by credit insurance, as well to containment of the cost of risk, especially on Dealer business, and operating expenses, which declined from 1.10% of outstandings in 2005 to 1.04% in 2006.

GRUPO RCI ESPANA – calle María Tubau n° 3 28050 Madrid – SPAIN Management: Gabriel GIL – Tel.: +34 91 379 41 04

5 France

he market for passenger cars and utility vehicles, all brands In this setting, average long-term rental outstandings amounted to combined, declined by 1.9% from 2005, to 2.44 million ?1.58bn, compared with ?1.53bn in 2005. new vehicle registrations in 2006. Renault achieved a Tvolume of close to 623,000 units, for an overall market share of In a difficult automobile market, average Dealer outstandings were 25.5%, down from 26.8% the year before. Sales of the Logan gave stable at ?2bn, owing to growth in the volume of financing provided rise to nearly 19,000 registrations and 2,600 new finance contracts. to Nissan dealers and volume growth on the Logan. Despite the launch of the Nissan Note, the Nissan brand accounted for only 42,614 vehicle registrations in 2006, down 15.7% from Pretax income of the Diac group was ?162.6m in 2006, compared 2005. Its market share was 1.75%, compared with 2.03% in 2005. with ?140.1m in 2005, owing largely to a notable improvement in The across-the-board rise in the Group’s rate schedules due to higher the cost of risk, which fell to ?28.1m in 2006 from ?47.6m the year interest rates did not work in favor of Diac group’s lending business. before. Excluding nonrecurring items, operating expenses declined Diac’s penetration rate on new vehicle sales (including Logan), by both in amount and as a percentage of outstandings. the car makers slipped to 32.1%, from 32.5% in 2005. Also of note in 2006 was a ?1.8bn long-term securitization issue Financing volume on new and used Renault vehicles came to backed by Diac receivables. 273,012 contracts, compared with 293,887 in 2005. The penetration rate on new vehicles fell 0.5 point to 33.2%. In addition, in thousands of euros 2006 2005 2,598 finance contracts were written for Logan sales. Number of contracts processed 287,829 307,855 New financings 3,379,984* 3,701,414 In terms of marketing, 2006 was notable for: • an increase in the proportion of loyalty-building balloon loans in BALANCE SHEET the product mix to 34% of all new financings, compared with 33% in 2005. This was achieved through joint marketing efforts with Gross outstandings 8,031,451 7,905,681 Renault Group, which included the launch of new product of this Allowance for impairment (224,005) (219,146) kind for used cars, New Deal VO; Net outstandings 7,807,446 7,686,535 • deployment of a new sales policy regarding roll-out of rental of which receivable from dealers 1,983,624 1,978,292 products; Available-for-sale securities 677,042 1,343,705 • startup of marketing and promotional operations for the Logan, Other assets 338,402 163,766 conducted jointly with the car maker. Debt 7,680,971 8,045,000 Development of the Nissan business continued. The penetration rate Other liabilities 513,383 471,438 on new vehicles was 24.8%, compared with 22.2% in 2005. Financing Provisions 51,107 45,704 volume on new and used Nissan vehicles was stable at 11,892 Equity 577,429 631,864 contracts, despite lower new vehicle registrations for the car maker. 2006 also saw: Balance sheet total 8,822,890 9,194,006 • a higher take-up of loyalty-building products in the Nissan INCOME STATEMENT business (more than 30% of new financings by Nissan Finance); • a successful effort in support of the launch of the Note. Net banking income 328,698 320,607 (excluding non-banking income) Average performing customer loan outstandings increased by 3.7%. Pretax income 162,639 140,079 Long-term rental business remained high in 2006, with new Net income 103,279 94,098 financings of close to ?1.1bn, in line with 2005 despite the fall-off in volume. While the product mix shifted in favor of long-term contracts, * excluding credit cards and personal loans with car rental companies and driving schools accounting for a lower Groupe Diac – 14, avenue du Pavé Neuf proportion of volume, the average unit amount per contract actually 93168 Noisy-le-Grand Cedex – FRANCE rose. The Nissan rental business posted a notable advance but remains Management: Jean-Pierre FRAMEZELLE – Tel.: +33 1 49 32 80 00 a very minor portion of Diac Location’s overall product mix. 6 RCI BANQUE BUSINESS REPORT 2006

Italy

he economic environment in Italy worsened in 2006, and RCI Italy continued to keep its cost of customer risk under control: the country’s GDP growth rate, at 1.3%, was the lowest in it was 0.76% of average performing loan outstandings in 2006, the euro zone, which averaged 2.7%. Furthermore, inflation compared with 0.77% in 2005. Efforts to increase productivity Tstayed above 2%. Household borrowing was up sharply (+13.2%) continued and helped to contain operating costs at ?27.4m. The from the previous year, reflecting a change in mentality of the pretax income was ?41.3m. population as regards consumer credit.

In an automobile market that grew by 3.9% to 2.5 million vehicles, Renault and Nissan saw their sales performance slip compared with in thousands of euros 2006 2005 2005. Their market shares dropped to 5.5% and 1.9% respectively in Number of contracts processed 68,117 86,112 2006, from 6.6% and 2.2% in 2005. New financings 717,666* 889,919

RCI Italy’s penetration rate was 32.7%, down from 35.8% in 2005. BALANCE SHEET In the Retail market, however, RCI Italy’s penetration remain high, at 41.9% in 2006 compared with 41.6% in 2005. In this setting, new Gross outstandings 2,056,143 2,357,769 financings amounted to ?717.6m, down from ?889.9m in 2005. Allowance for impairment (93,740) (94,212) Net outstandings 1,962,403 2,263,558 As part of the car makers’ marketing integration strategy, RCI Italy of which receivable from dealers 395,084 403,171 made promotional offerings and expanded its associated services. In Available-for-sale securities 269,967 345,769 support of Renault’s loyalty-building efforts, RCI Italy launched a Other assets 1,475,941 1,798,355 balloon loan product, “New Deal.” Debt 3,514,402 4,197,455 In the Enterprise market, RCI Italy supported Renault’s sales efforts Other liabilities 67,835 107,789 in the local fleet market, although penetration in this segment Provisions 5,561 6,971 decreased slightly from 35.2% in 2005 to 34.4% in 2006. The long- Equity 120,513 95,467 term rental business is managed by Overlease, a joint venture with LeasePlan. The fleet under management now exceeds 14,500 Balance sheet total 3,708,311 4,407,682 vehicles, compared with 13,600 in 2005. INCOME STATEMENT

In the Dealer segment, RCI Italy continued its assumption of risk on Net banking income 85,217 94,939 Nissan dealerships and now carries 71% of the total, compared with (excluding non-banking income) 48% at year-end 2005. It has borne 100% of the risk on Renault Pretax income 41,318 45,766 dealerships since year-end 2004. Net income 26,275 27,164

Average performing loan outstandings were ?2,096m in 2006, * excluding credit cards and personal loans down from ?2,396m in 2005. In this context, net banking income as a percentage of average outstandings came to 4.07%, up from 3.96% in 2005. The improvement is attributable mainly to a sharp increase in income from services, which rose from ?11m in 2005 to ?20.9m in 2006.

RCI BANQUE – Succursale Italiana RNC S.p.A. Via Tiburtina, 1155 – I-00156 Rome – ITALY Management: Bruno KINTZINGER – Tel.: +39 06 41 773 478

7 Netherlands

he Netherlands posted GDP growth of around 3% on the strength of rising purchasing power and an expanding labor in thousands of euros 2006 2005 market. Inflation and wage growth both held at moderate Number of contracts processed 16,300 18,212 Tlevels. New financings 128,090 159,950

In a flat automobile market, Renault lost a half-point of market BALANCE SHEET share, dropping to 8.5%, while Nissan improved its performance Gross outstandings 451,228 602,252 modestly, capturing a 2.6% share (up 0.2 point). Allowance for impairment (22,508) (33,232) RCI’s overall penetration rate was down 0.9 point to 20.5%, with a Net outstandings 428,720 569,020 favorable mix for Renault (up 0.9 point) and an unfavorable one for of which receivable from dealers 271,361 277,514 Nissan (down 8.5 points). Available-for-sale securities 4,229 5,063 Other assets 6,063 22,412 In the Retail segment, Renault’s “One Stop Shopping” initiative and Debt 383,082 525,004 the introduction of the same concept by Nissan buoyed the penetration rate, which rose by 0.9 point to 17.2%. Other liabilities 29,125 14,395 Provisions 15,880 12,045 In the fiercely competitive Enterprise market, RCI Netherlands Equity 10,925 45,051 chose to outsource its long-term rental business and sold its entire Balance sheet total 439,012 596,495 portfolio in this line to ALD, effective 1 July 2006. INCOME STATEMENT Net income was ?16.9m. Excluding the gain on disposal, the subsidiary’s profit was ?7.4m. Net banking income 27,454 12,257 (excluding non-banking income) Pretax income 16,867 (677) Net income 9,874 (464)

RCI FINANCIAL SERVICES B.V – Pompmolenlaan 29 NL-3447 CK Woerden (P.O. Box 280 – NL-3440 AC Woerden) NETHERLANDS Management: Alain GUIDOU – Tel.: +31 348 49 10 10

8 RCI BANQUE BUSINESS REPORT 2006

Portugal

n an automobile market that was down 5.1% to 259,255 new vehicle registrations in 2006, Renault held its top spot as the in thousands of euros 2006 2005 leading brand of passenger cars and utility vehicles, despite a Number of contracts processed 16,770 19,564 Idecline in market share to 13.5% from 14.3% in 2005. New financings 220,722 252,728

Nissan’s market share was stable at 2.3%. RCI Portugal’s penetration BALANCE SHEET rate slipped to 36.4% in 2006, compared with 38.3% in 2005. New Gross outstandings 514,404 516,890 financings declined by 12.7% to ?221m owing to higher interest Allowance for impairment (46,953) (44,581) rates and intensified competition from Portuguese banks. Net outstandings 467,451 472,309 Close coordination with the car makers’ marketing efforts enabled of which receivable from dealers 105,286 95,188 RCI Portugal to implement promotional campaigns that buoyed the Available-for-sale securities 20,941 25,367 Retail business. Other assets 36,836 52,799 Debt 455,447 451,853 The Enterprise business was hit by a steep fall in the market for used vehicles, which made resales difficult. RCI Portugal incurred losses Other liabilities 28,501 53,082 on such resales and also took an impairment charge against residual Provisions 5,092 4,104 values. Equity 36,188 41,436 Balance sheet total 525,228 550,475 In the Dealer segment, lending expanded strongly, with average performing loan outstandings up 6.6% to ?104m, compared with INCOME STATEMENT ?98m in 2005. In total, average loan outstandings of RCI Portugal came to ?458m, an increase of 3.2% over 2005. Net banking income 14,411 18,314 (excluding non-banking income) The pretax result was a loss of ?0.9m in 2006, compared with a Pretax income (847) 8,752 profit of ?8.8m in 2005. This result includes a restructuring charge Net income 3,107 4,795 of ?1.9m.

RCI Banque Portugal – Lagoas Park, Edificio 4 2740-267 Porto Salvo – PORTUGAL Management: Patrick POULAIN – Tel.: +351 21 850 2000

9 United Kingdom RFS

lthough GDP grew in 2006, the UK automobile market contracted slightly to 2.7 million new vehicle in thousands of euros 2006 2005 registrations, down 3% from 2005. In this context, Exchange rate (year end) 0.6715 0.6853 ARenault lost 1.1 points of market share compared with 2005, Exchange rate (average) 0.6830 0.6841 dropping to 6%. Number of contracts processed 70,026 72,955 In 2006 RFS processed 70,026 vehicle finance contracts, versus New financings 439,397* 462,881 72,955 in 2005. The penetration rate on Renault new-vehicle BALANCE SHEET registrations declined by 2.5 points to 28.2%. Gross outstandings 959,969 1,021,156 Overall, RFS’s average performing loan outstandings came to Allowance for impairment (18,339) (16,070) ?982m (group share), a decline of 8% from 2005. Net outstandings 941,630 1,005,087 of which receivable from dealers 163,284 185,250 Pretax income came to ?5.5m, less than in 2005, when first-time Available-for-sale securities - - application of IFRS entailed recognition of a number of Other assets 13,197 13,434 nonrecurring positive items. The 2006 result was hit by a decline in volume, deterioration in dealer risk, and further impairment of Debt 897,255 967,470 residual values. Other liabilities 36,554 28,590 Provisions 149 146 In July 2006, RCI Banque informed its partner of its intent to end Equity 20,869 22,315 the joint venture and acquire 100% of RFS in order to bring all its Alliance brand financing activities in the United Kingdom under one Balance sheet total 954,827 1,018,520 roof. INCOME STATEMENT Net banking income 21,179 30,837 (excluding non-banking income) Pretax income 5,504 23,748 Net income 3,696 16,621

* excluding credit cards and personal loans

RFS Ltd – Maple Cross House – Denham Way – Maple Cross Rickmansworth – Hertfordshire WD3 9SX – UNITED-KINGDOM Management: Geoffroy LOPIN – Tel.: +44 1923 726 526

10 RCI BANQUE BUSINESS REPORT 2006

NFGB

espite the introduction of the Note, Nissan Motor Great Britain’s (NMGB) market share declined by 0.4 point in thousands of euros 2006 2005 D from 2005, to 3.2% in 2006. Exchange rate (year end) 0.6715 0.6853 Exchange rate (average) 0.6830 0.6841 The number of finance contracts processed by NFGB was down 13.1% to 38,015. Number of contracts processed 38,015 43,753 New financings 428,320* 471,188

Increased integration with the car maker’s marketing efforts kept BALANCE SHEET promotional campaigns going, especially in the Retail business. Financing volume on new vehicles in the Retail market grew by 20% Gross outstandings 856,923 810,804 compared with 2005, and the penetration rate rose to 29.7%, from Allowance for impairment (22,505) (20,698) 27.6% in 2005. Net outstandings 834,418 790,107 of which receivable from dealers 199,211 137,605 In the Enterprise market, the consequences of NMGB’s withdrawal Available-for-sale securities 5,711 46,196 from the daily rental business were felt. Other assets 45,158 47,220 The Dealer financing business continued to grow in 2006, with Debt 732,228 735,271 average outstandings rising by ?21m to ?188m. Other liabilities 37,032 36,734 Provisions 5,022 4,537 In all, average performing loan outstandings increased by ?42m over Equity 111,005 106,981 2005. Balance sheet total 885,287 883,523 Pretax income was ?14.6m, compared with ?16.1m in 2005. The INCOME STATEMENT decrease is attributable to a rise in the cost of Dealer risk (up ?1.2m over 2005) and higher operating costs associated with merging the Net banking income 31,803 30,893 two sales financing arms in Great Britain (an increment of ?1.6m (excluding non-banking income) compared with 2005). Pretax income 14,557 16,080 Net income 13,361 11,257

* excluding credit cards and personal loans

Nissan Finance (GB) Limited – Egale House – 78 St Albans Road Watford - Hertfordshire WD17 1AF – UNITED KINGDOM Management: Steve GOWLER - Tel.: +44 1923 686 102

11 Switzerland

n an automobile market up 7.6% with 289,353 new vehicle Pretax income was ?7.3m, down from 2005 owing to strong margin registrations in 2006, Renault achieved 6.1% penetration, down pressure on finance contracts and higher IT service costs for 0.6 point compared with 2005. Nissan’s market share was 2.9%, scheduled implementation of new projects (management and Iup from 2.8% the previous year. In its first full year after launch, accounting systems). Other expense items remained under control Dacia accounted for 0.2% of the market. and even improved slightly during the year.

2006 was particularly notable for the entry of new lenders in the Swiss automobile financing market. Their arrival drew an aggressive reaction from market leaders seeking to hold onto their positions, in thousands of euros 2006 2005 despite the steady rise in refinancing rates. Exchange rate (year end) 1.6069 1.5551 Exchange rate (average) 1.5693 1.5466 In this setting, RCI Finance’s penetration rate came in at 32.2% on Renault business and 21.9% on Nissan business, compared with Number of contracts processed 10,536 10,906 32.6% and 22.5% in 2005. New financings 145,453 150,157

BALANCE SHEET The penetration rate on Dacia brand sales was 26.3%. Gross outstandings 292,283 308,433 In all, RCI Finance booked 10,536 new vehicle finance contracts in Allowance for impairment (6,466) (5,992) 2005, a slight decrease compared with 2005. Net outstandings 285,817 302,441 of which receivable from dealers 45,959 48,529 Average performing customer loan outstandings rose slightly to Available-for-sale securities 13,892 17,532 ?245.8m. RCI Finance processed 4,712 new vehicle loan contracts in the Retail segment in 2006, down 10% from 2005. Deployment Other assets 65,854 40,903 of the “RCI Direct” system at Renault and Nissan dealerships Debt 305,594 301,819 continued, and more than 66% of contracts were entered online. This Other liabilities 12,948 12,838 system provides a broad range of services to dealers for offer Provisions 1,630 1,624 preparation, approval, case monitoring and generation of contract Equity 45,391 44,595 documents. Balance sheet total 365,563 360,876 In the Enterprise segment, new vehicle contract volume rose sharply INCOME STATEMENT from 1,894 in 2005 to 2,524 in 2006, an increase of 33%. Net banking income 14,728 16,035 Dealer average performing loan outstandings were stable compared (excluding non-banking income) with 2005 at ?64.3m. Average performing loan outstandings across Pretax income 7,291 9,019 all segments were likewise stable at ?310.1m. Net income 5,472 6,730

RCI FINANCE S.A. – Riedthofstrasse 100 CH-8105 Regensdorf – SWITZERLAND Management: Jean-Louis LABAUGE – Tel.: +41 44 871 24 20

12 EASTERN & CENTRAL EUROPE RCI BANQUE BUSINESS REPORT 2006

Hungary

he Hungarian automobile market contracted for the second year in a row. The decline was particularly steep in the in thousands of euros 2006 2005 second half. The 9.5% decrease on the year is attributable in Exchange rate (year end) 251.7700 252.8700 Tpart to government measures that had an impact on purchasing Exchange rate (average) 263.8250 247.6820 power. Number of contracts processed 2,586 6,471 With 11,903 new vehicles registered, Renault lost 0.7 point of New financings 18,148 53,508 market share compared with 2005, falling to 5.95% and seventh BALANCE SHEET place. Gross outstandings 118,016 142,702 In the face of strong competition from multi-make lenders, Renault Allowance for impairment (1,609) (1,044) Credit financed 2,586 vehicles. The penetration rate on new vehicles Net outstandings 116,407 141,658 was 17%. of which receivable from dealers 23,784 20,366 Available-for-sale securities - 285 Average performing loan outstandings amounted to ?126.8m, of Other assets 7,567 7,893 which ?106.3m represented Customer loans. Debt 107,669 136,715 The pretax income was ?3.8m. Other liabilities 2,848 2,654 Provisions - - Equity 13,457 10,468 Balance sheet total 123,974 149,836

INCOME STATEMENT Net banking income 7,952 7,930 (excluding non-banking income) Pretax income 3,771 3,908 Net income 2,812 3,133

RCI Zrt. – Vaci ut 81-85 H-1139 Budapest – HUNGARY Management: Christophe DUROSELLE - Tel.: +36 1 298 82 65

13 Poland

fter three years of negative growth due to massive imports Greater recourse to centralized refinancing necessitated an equity of used vehicles, the Polish automobile market posted a 2% infusion for the Polish affiliate. expansion in 2006, with 277,887 new vehicles sold. ARenault and Dacia sales were stable, with 22,393 new vehicle registrations. Volume was buoyed by Renault’s good results for its range of utility vehicles: the brand took the no. 2 spot in the utility vehicle segment in 2006.

RCI Poland booked 7,302 new vehicle finance contracts in 2006, in in thousands of euros 2006 2005 line with 2005. The penetration rate on new vehicles was 30.9%, Exchange rate (year end) 3.8310 3.8600 down 0.5 point from the previous year. Exchange rate (average) 3.8883 4.0188 In the Retail segment, RCI Bank Polska in mid-June took over the Number of contracts processed 7,302 7,287 lending business previously operated under a commercial agreement New financings 44,803 24,944 with ING. New financings were ?10.4m, or 23% of the total. BALANCE SHEET Growth prospects will hinge on a new product plan that aims to increase both the average amount financed and the average term of Gross outstandings 141,466 106,441 finance contracts. Effective in January 2007, RCI Bank Polska has Allowance for impairment (5,280) (5,143) also taken over customer financing of Nissan sales. Net outstandings 136,186 101,298 of which receivable from dealers 73,001 50,854 In the Enterprise segment, new financings amounted to ?34.4m, in Available-for-sale securities 1,068 3,747 a highly competitive market. The long-term rental business was transferred to ALD under a partnership agreement effective from the Other assets 8,502 7,693 second quarter of 2006. Debt 112,041 90,977 Other liabilities 2,802 3,765 In the Dealer segment, RCI Bank Polska continued its assumption of Provisions 409 359 risk on Renault dealerships and began offering financing to Nissan Equity 30,504 17,638 dealers in late December. Balance sheet total 145,756 112,738 Average performing loan outstandings reached ?109.3m in 2006, up from ?92.4m in 2005, owing to the ?16.9m increase in Dealer INCOME STATEMENT outstandings, which rose to ?57.6m. Net banking income 6,718 6,724 (excluding non-banking income) Pretax income came to ?1.6m, down slightly from ?1.8m in 2005 Pretax income 1,569 1,797 owing to unavoidable project development costs to start up the Net income 1,083 1,358 customer lending and Nissan dealer financing activities.

RENAULT CREDIT POLSKA – ulica Marynarska 13 PL-02-674 Warsaw – POLAND Management: Laurent DAVID – Tel.: +48 22 541 11 40

14 RCI BANQUE BUSINESS REPORT 2006

Czech Republic

ith inflation contained, Czech economic growth Consolidated financial statements continued at a high level in 2006. The automobile (Czech Republic and Slovakia) market was up 3.1%, with 171,850 new vehicle Wregistrations. Renault ended the year in third place in the market in thousands of euros 2006 2005 with a share of 6.8%, down 0.2 point from 2005. Dacia’s market Exchange rate (year end) 27.4850 29.0000 share dropped to 0.89% in 2006, down from 1.52% in 2005. Exchange rate (average) 28.3116 29.7589 Together, Renault and Dacia accounted for 13,284 new vehicle registrations, compared with 14,324 in 2005. Number of contracts processed 9,407 7,702 New financings 24,058* 20,362 RCI Czech Republic achieved a marked improvement in penetration BALANCE SHEET rate on new vehicles: 48.5% for Renault (39.7% in 2005) and 45.1% for Dacia (31.5% in 2005). The number of new and used vehicle Gross outstandings 64,319 57,253 finance contracts written was up 20% from 2005, to 7,268. Average Allowance for impairment (1,025) (984) performing customer loan outstandings amounted to ?38.9m in Net outstandings 63,294 56,269 2006, an increase of 18.4% over 2005, largely on the strength of new of which receivable from dealers 19,894 19,713 financings (?24.1m in 2006, compared with ?20.3m in 2005). Available-for-sale securities 810 4,666 Dealer average performing loan outstandings were ?19.8m. Other assets 729 383 Pretax income amounted to ?1.35m. It represented 50% of the Debt 48,822 51,436 earnings of the Renault Leasing CZ joint venture and 100% of the Other liabilities 3,256 3,138 earnings of the RCI Finance CZ subsidiary. Provisions - - Equity 12,755 6,744 Balance sheet total 64,833 61,318

INCOME STATEMENT Net banking income 2,954 6,203 Slovakia (excluding non-banking income) Pretax income 1,493 4,808 Net income 1,150 4,496

he Slovakian automobile market expanded by 10.5% over *excluding credit cards and personal loans 2005 to 78,366 new vehicles sold. Against a backdrop of declining market shares for Renault (5.7% in 2006, versus T6.4% in 2005) and Dacia (1.3% versus 1.6%), RCI Finance CZ’s branch office in Slovakia is distributing a range of financing products under a commercial agreement with CAC Leasing Slovakia.

RCI Slovakia posted penetration rates of 39.8% on Renault (32.2% in 2005) and 34% on Dacia (12.4% in 2005). The total number of new and used vehicle finance contracts written was 2,139, an increase RENAULT Leasing CZ s.r.o – IBC Pobrezni 3 of 30.5% from 2005. 186 00 Prague 8 – CZECH REPUBLIC Postal address: Radlickâ 14/3201 – 150 0 Prague 5 CZECH REPUBLIC Pretax income came to ?147 thousand, compared with ?54 Management: Jean-Jacques THIBERT – Tel.: +420 2 570 91 44 thousand in 2005.

15 Romania

he Romanian economy continued to grow in 2006, driven by strong inflows of foreign investment and a rise in in thousands of euros 2006 2005 purchasing power. The automobile market expanded by Exchange rate (year end) 3.3835 3.6771 T15%. Even so, rates of car ownership remain low by European Exchange rate (average) 3.5211 3.6234 standards. Number of contracts processed 41,278 46,508 In this highly competitive market, the combined market share of New financings 88,322 38,256 Dacia, Renault and Nissan decreased to 46.6% in 2006, down from BALANCE SHEET 55.5% in 2005, owing mainly to decreasing sales of the Dacia brand. RCI Romania financed 32.2% of Dacia sales, 26.1% of Renault sales Gross outstandings 149,237 58,553 and 14% of Nissan sales. The penetration rate fell to 30.7%, Allowance for impairment (1,876) (345) compared with 33.3% in 2005. Net outstandings 147,361 58,207 of which receivable from dealers - - The number of vehicle finance contracts declined to 41,278 units, Available-for-sale securities 3,987 623 compared with 46,508 in 2005. New vehicle sales finance contracts Other assets 2,062 6,353 represented a total of 27,735 units. Lease contracts represented a total of 13,510 units. Debt 131,123 50,060 Other liabilities 1,244 2,931 Average performing loan outstandings amounted to ?122.3m in Provisions - - 2006, up 43% from the year before, on a lengthening of the average Equity 21,043 12,192 contract term and an increase in the average amount financed. Balance sheet total 153,410 65,183 The pretax income was ?12.8m. INCOME STATEMENT RCI Banque has bought out SG’s equity interest in RCI Leasing, Net banking income 18,527 10,629 and this subsidiary was fully consolidated in 2006. (excluding non-banking income) Pretax income 12,774 8,577 Net income 10,101 7,318

RCI ROMANIA – Bd. Aviatorilor, n°41, etaj 3, sector 1 Bucharest – ROMANIA Management: Philippe BUROS – Tel.: +40 21 201 20 04

16 MERCOSUR RCI BANQUE BUSINESS REPORT 2006

Argentina

006 brought confirmation of the improved economic Pretax income was ?2.1m, compared with ?1.8m in 2005 on a situation in Argentina. GDP growth remained solid. The comparable basis (constant scope of consolidation, excluding automobile market expanded by 16% to 420,304 vehicles. nonrecurring gains of ?2.3m from the sale of Argentine government 2Thanks to a 28% increase in volume, Renault achieved a market share bonds). of 11.5%, up from 10.4% in 2005. Nissan’s performance faded slightly, with a market share of 0.8% in 2006 compared with 1% in in thousands of euros 2006 2005 2005. Exchange rate (year end) 4.0063 3.5617 Exchange rate (average) 3.8371 3.6136 The market for automobile financing grew strongly in 2006, but is still quite limited: only one vehicle in three is bought on credit. The Number of contracts processed 13,045 7,305 competition between lenders is intense. New financings 59,235 17,605 BALANCE SHEET Rombo Compañia Financiera confirmed its market-leading position in the Retail segment thanks in large part to its integration into the Gross outstandings 85,730 37,456 car makers’ sales offerings and its development of commercial Allowance for impairment (2,021) (1,330) relations with the dealer network. Net outstandings 83,709 36,125 of which receivable from dealers 23,549 18,097 The Customer lending business posted 13,045 new vehicle finance Available-for-sale securities 3,974 2,733 contracts, an increase of 79% compared with 2005. The penetration Other assets 2,806 1,775 rate was 22.3% on Renault business (versus 16.6% in 2005) and 12.8% on Nissan business (9.9% in 2005). Application of industrial Debt 72,183 27,275 methods for optimizing the loan underwriting and administration Other liabilities 8,263 1,137 processes brought productivity gains without sacrificing prudent Provisions - - lending policies consistent with a low cost of risk. Equity 10,043 12,221

In the Dealer segment, lending expanded strongly, with average Balance sheet total 90,489 40,633 performing loan outstandings up 46% to ?22m, compared with INCOME STATEMENT ?15.1m in 2005. Net banking income 5,042 4,536 For all segments combined, average performing loan outstandings (excluding non-banking income) increased by more than 87% to ?69.5m in 2006, compared with Pretax income 2,089 3,420 ?37m in 2005 (on a comparable scope of consolidation basis). Net income 1,358 2,623

To provide a secure basis for growth in customer lending and diversify refinancing by tapping local capital markets, a note issuance program was set up in 2006 with a ceiling of ARS200 million. The program has received an raAA- rating from FitchRatings and an raA rating from Standard & Poor’s. Two issues were made for a total of ARS 70 million, equivalent to about one-third of Rombo Companía Financiera’s debt at year-end 2006.

RCI Banque – Sucursal Argentina – Fray Justo Sta Maria de Oro 1744 (C1414DBB) Buenos Aires – ARGENTINA Management: Jesús HERNÁNDEZ TOQUERO – Tel.: +54 11 4778 2134

17 Brazil

DP growth improved to 3% in 2006, up from 2.3% in 2005. Despite Brazil’s trade surplus, however, its growth in thousands of euros 2006 2005 lagged behind that of other emerging countries. 2006 Exchange rate (year end) 2.8092 2.7423 Gbrought a decline in the nominal interest rate to 13.25% at year-end Exchange rate (average) 2.7309 3.0369 2006, compared with 18% a year earlier. Number of contracts processed 27,502 31,977 Country risk also fell as Brazil paid down its foreign debt and kept its New financings 241,393 132,076 economy on track. BALANCE SHEET With more than 1.8 million new vehicle registrations, the automobile Gross outstandings 401,703 213,919 market posted strong growth, up 13% over 2005. Market shares of Allowance for impairment (23,279) (8,423) Renault (2.82%) and Nissan (0.31%) were both down slightly Net outstandings 378,424 205,497 compared with 2005. of which receivable from dealers 102,222 57,495 Available-for-sale securities 5,346 4,437 In 2006, counting both loan and lease contracts, RCI Brazil financed Other assets 13,660 6,418 39% of Renault sales and 30% of Nissan sales, with a total of 27,502 new contracts on the year. New financings amounted to ?241m. Debt 324,220 176,464 Other liabilities 41,059 5,279 In the Retail lending business, average loan terms continued to Provisions 850 579 lengthen (from 28 months in 2005 to 35 months in 2006), and the Equity 31,301 34,028 average amount financed increased as well (from ?6,800 in 2005 to ?8,700 in 2006). These factors explain the 27% increase in average Balance sheet total 397,430 216,351 customer loan outstandings. INCOME STATEMENT The rise in the car makers’ volume of business led to an increase in Net banking income 34,514 18,102 Dealer loan outstandings, which increased by 17.3% from 2005 to (excluding non-banking income) 2006. Pretax income 18,691 8,632 Net income 8,726 5,790 Pretax income (at constant scope) was ?18.7m, up 32% from 2005.

Margins on customer loans held up well, and cost-cutting actions also contributed positively to the bottom line. Operating costs decreased to 3.13% of outstandings, compared with 3.24% in 2005, offsetting a sharp increase in the cost of customer risk in line with market trends.

Financeira RENAULT BRAZIL – c./o RENAULT DO BRAZIL S.A. Rua Pasteur, 463, Conjunto 203/204 Batel 80 250 080 Curitiba – BRAZIL Management: Amir DJOURABTCHI – Tel.: +55 41 3025 1 505

18 ASIA RCI BANQUE BUSINESS REPORT 2006

South Korea

ith 4.2% GDP growth in 2006, the Korean economy continued on the rapid pace posted in 2005, in thousands of euros 2006 2005 characterized by booming foreign trade, brisk Exchange rate (year end) 1,224.810 1,184.420 Wconsumer demand, a high level of capital spending, and a gradual rise Exchange rate (average) 1,198.384 1,274.153 in interest rates. Number of contracts processed 15,360 The Korean automobile market expanded by 3.1% relative to 2005, New financings 183,241 with sales of 1,185,798 units. BALANCE SHEET Against this backdrop, Renault Samsung Motors posted sales of Gross outstandings 141,657 119,088 vehicles and a market share of 10%, stable compared with Allowance for impairment (491) 2005. Sales of the Nissan group’s Infiniti brand, launched in Korea Net outstandings 141,166 in August 2005, came in at 1,712 units in 2006. of which receivable from dealers - Available-for-sale securities 1,802 RCI Financial Services Korea began operations in March 2006. It Other assets 7,890 achieved a penetration rate of 12.7% on full-year new vehicle registrations in 2006: 12.8% on Renault Samsung Motors and 4.4% Debt 116,834 on Infiniti. Other liabilities 9,444 Provisions 234 With 15,360 vehicle finance contracts written during its first year in Equity 24,346 business, RCI Financial Services Korea has adopted a strategy of gradually increasing its market share. Balance sheet total 150,858 INCOME STATEMENT Average performing loan outstandings amounted to ?55.4m, and the pretax loss was ?1.1m. Net banking income 6,223 (excluding non-banking income) Pretax income (1,070) Net income (15)

RCI FINANCIAL SERVICES KOREA – 13th Floor, Woori Building, 10, 1-ka, Bongrae-Dong – Choong-Ku – Seoul 100-161 – KOREA Management: Dominique SIGNORA

19 Internal Control and Financial Security

Report of the Chairman of the Board pursuant to the Financial Security Act

1. PREPARATION AND ORGANIZATION OF THE experience acquired in performing their duties at the parent company WORK OF THE BOARD OF DIRECTORS and shareholder. Each director owns at least one share, in accordance with the The purpose of this first part of the report is to present and describe provisions of the by-laws. the working methods and decision-making processes of the Directors receive no compensation for serving on the Board. governing bodies and the distribution of powers among them. Mr. Antoine ROUSSELIN, Chief Financial Officer, participates in Information is presented on the following: meetings of the Board of Directors as a responsible officer within the • composition of the Board of Directors, management procedures meaning of Article L.511-13 of the Monetary and Financial Code. and scope of senior management powers; Mr. Philippe GAMBA is likewise a responsible officer for this • manner of preparation for Board meetings; purpose. • activities of the Board during 2006. On 28 November 2006 the CECEI, the French regulatory body for credit institutions and investment firms, approved the Board’s 1.1. BOARD OF DIRECTORS AND GENERAL designation, at its meeting on 21 July 2006, of Mr. Eric MANAGEMENT SPIELREIN, Senior Vice President and Corporate Secretary, as a responsible officer. 1.1.1. COMPOSITION OF THE BOARD OF DIRECTORS 1.1.2. AUTHORITY AND POWERS OF GENERAL At 31 December 2006 the Board of Directors was composed of MANAGEMENT seven directors elected for terms of six years. In accordance with Article L.225-551-1 of the Commercial Code, the Board of Directors, at its meeting on 24 July 2002, elected to List of directors’ concentrate the powers of the chairman of the board and the Chief Last name Position Date Term positions in other compa- Executive Officer. Mr. GAMBA occupies both positions. first name in the company elected expires nies and on other boards It is noted that there are no limitations on the powers of the CABRIER Executive Vice 22.07.2004 05.2012 Patrice President, Europe Chairman and Chief Executive Officer other than those required by law and the interest of the Company. However, it is specified that the DASSAS 18.07.2003 05.2012 Alain Board has applied a limitation to the authority of the Chief Executive DUZAN Officer, who must secure the approval of the Board to purchase, sell 18.07.2003 05.2012 Jean-Baptiste or mortgage buildings. The Board has reserved these powers for See the itself. FRAMEZELLE Executive Vice Management Jean-Pierre President, Sales - 28.05.2003 05.2009 France Report 1.2. PREPARATION OF BOARD OF DIRECTORS GAMBA Chief Executive MEETINGS 26.05.2000 05.2012 Philippe Officer

BLAIN The Board meets as often as the interest of the Company requires, 3.02.2005 05.2012 Patrick upon notice duly served eight days in advance by the secretary of the Board, who is appointed by the Chairman and Chief Executive MOULONGUET 5.02.2004 05.2012 Thierry Officer, and sent by ordinary letter in accordance with the provisions of the by-laws.

The directors have been elected to the Board of Directors by virtue In accordance with Article L. 225-238 of the French Commercial of their knowledge of the Company’s activity and lines of business, Code, the Company’s external auditors are summoned by registered their technical and general expertise and, in some cases, the letter to attend the Board meetings held to review and approve the

20 RCI BANQUE BUSINESS REPORT 2006

year-end financial statements (in February) and to review the financial statements for the first half year (in July).

All technical documents and information required for the directors to fulfill their responsibilities are sent to them in compliance with the applicable provisions of the law and the Company’s by-laws. In accordance with those provisions, directors have the right to request and receive information on an ongoing basis.

1.3. ACTIVITY OF THE BOARD OF DIRECTORS DURING 2006

The Board of Directors met four times in 2006.

At each of these meetings, except the meeting on 30 May 2006 for the purpose of renewing Mr. GAMBA ’s term of office as Chief Executive Officer, sales and operating results for each of the group’s business segments were presented in detail. This information is part of the meeting package provided to all Board members. On 3 February 2006, the Board met to review the annual financial statements for 2005 to be submitted to the Annual General Meeting entail commitments affecting the Company’s future, and major and to hear reports on securitization and bond issuance transactions. transactions likely to alter significantly the scope of operations or On 21 July 2006, the Board met to approve the interim financial capital structure of the Company and the group it controls. The statements for the six months ended 30 June, update financial Board ensures that the strategy implemented by the group is reporting for year-end bond issues, and call a special shareholders’ consistent with its long-term strategic aims. meeting to decide whether RCI Banque should seek the status of The Board of Directors also decides on changes of members of the insurance intermediary under French legislation adopted on 15 Board, calls General Meetings of Sshareholders including the Annual December 2005 (transposing the EU directive of 9 December 2002 General Meeting that approves the financial statements, and on the exercise of the freedom to provide services and the freedom delegates powers. Meetings of the Board are held at 13-15, Quai Le of establishment). A meeting was held on 23 November 2006 on the Gallo, 92512 Boulogne Billancourt, the head office of the parent basis of financial results as of 30 September 2006. The proposal to company. Minutes of Board of Directors meetings are drawn up by become an insurance intermediary was not adopted. the secretary of the Board for approval at the following meeting. The November meeting was also devoted to the report on internal They are then filed as corporate records and may be inspected by any control and financial security, for the purpose of reviewing the 2007 director at the Company’s head office. Audit Plan and the preliminary audit plan for 2008. The Board reviewed implementation of audit recommendations, the 2006 2. INTERNAL CONTROL PROCEDURES mapping of operational risks, the business continuity plan, the information system security policy, and the compliance control RCI Banque group’s internal control system is organized in system. accordance with French regulations on banking and finance, in particular CRBF Regulation 97-02. The system is an ongoing As provided by law, the Board of Directors has a responsibility at process implemented by the Board of Directors, management and each meeting to exercise ongoing control over the management of staff of RCI Banque. the Company. The Company’s by-laws (Articles of Association) give the Board the power to authorize capital transactions, bond issues, The purposes of the internal control system are to: signature or termination of agreements with other enterprises that • preserve the capital and asset value of the Company;

21 Internal Control and Financial Security

A hierarchical organization • the Executive Committee, as the body in charge of managing the RCI Banque group, directs the group’s policy and strategy, • the several Management Committees within the group implement the actions needed to meet the objectives set by the Executive Committee.

A functional organization The functional departments play the role of “technical parent” for the following purposes: • establishing specific policies and rules of operation for IT systems, human resources, financial policy, credit risk management, etc.), • providing support to the operational departments and ensuring that established policies are implemented as they should be.

The group instituted a standardized mapping of business processes in 2004 and now updates it at regular intervals.

2.1.1.2. Defined scope of responsibility and delegation • limit the effects of uncontrollable variations in business activity and These operating principles are supplemented by a system of anticipate their impact; delegations that controls deployment of group policies at the basic • ensure compliance with applicable laws and regulations; operational level. Areas of responsibility and delegated authority are • keep the governing bodies and the Board informed of risks and the determined as follows: level at which they are mastered; • generate fair, reliable accounting and financial information. Definition of functions The organization of the group is set out in an official organization As with any control system, however, it cannot provide an absolute chart. Responsibilities are defined at each level of the organization, guarantee that risk is completely eliminated. This report provides an with the scope and limits of each individual’s responsibilities defined overview of the internal control procedures by describing, in the in a position description. following order: • the general control and oversight environment at the RCI Banque Delegation of powers group, The decision-making process within the RCI Banque group is based • the special-purpose organization that oversees the preparation of on a system for delegating powers from the Chairman on down, to accounting and financial information. meet two objectives: • facilitate empowerment and accountability of line personnel, 2.1. CONTROL AND OVERSIGHT ENVIRONMENT • ensure that commitments are made at the appropriate level. The system sets precise boundaries by level on the scope of decisions that 2.1.1. GROUP ORGANIZATION line personnel are authorized to make. It serves as a benchmark by which those conducting the second-level and third-level internal 2.1.1.1. Oversight system controls can verify proper application. The RCI Banque group is organized into divisions that bring The system includes a set of limits for financial and credit risks together entities in similar lines of business, geographic sectors, or established with the approval of the Renault Group. These limits are both. Overall consistency and coordination are provided by a system set out in periodically updated Internal Procedure Memoranda. of oversight based on two structural principles, hierarchical and Foreign exchange instruments, interest rate instruments and functional: currencies approved for use in managing market risks are specified on

22 RCI BANQUE BUSINESS REPORT 2006

a list approved by RCI Banque’s Finance Committee. For credit risks, authority. Each subsidiary has its own Internal Control Committee. the Credit Risk Committee reviews and validates the ways in which The RCI Banque group’s Corporate Secretary, as responsible officer, these powers have been delegated within the group and its affiliates. coordinates the ongoing and periodic control systems.

2.1.2. INTERNAL CONTROL SYSTEM Ongoing control The head of the Internal Control and Financial Risk Monitoring 2.1.2.1. Responsible bodies department, who reports to the Corporate Secretary, is responsible The Board of Directors, a deliberative body, monitors and guides for ongoing internal control within the meaning of Article 6a of the Executive Committee to ensure that the internal control system CRBF Regulation 97-02 as well as for supervision of compliance is implemented. within the meaning of Article 11 of the Decree of 31 March 2005 The RCI Banque group’s Audit Committee assists the Board of amending that regulation. Directors in its oversight mission by monitoring the quality and The Internal Control and Financial Risk Monitoring general orientations of the group’s internal control system. Department, attached to the office of the Corporate Secretary, In particular, the Audit Committee validates the annual audit plan oversees the RCI Banque group’s internal control system. This and the annual internal control report required by Article 38 of department is in charge of organizing and leading the internal CRBF Regulation 97-02. control system for the group as a whole. For internal control oversight within RCI Banque group subsidiaries, the Internal The RCI Banque group’s Internal Control Committee, an Control and Financial Risk Monitoring Department relies on local executive body composed of all Executive Committee members, internal controllers who report to it functionally or, in the case of the spearheads the internal control process. It reports periodically on the French subsidiary, directly. The internal controllers at other internal control situation to the Board of Directors, to the Audit subsidiaries report directly to the subsidiary’s general manager. In all Committee and, via the annual report prepared for the Board of cases, the internal controllers’ primary responsibilities within the Directors pursuant to CRBF Regulation 97-02, to the supervisory subsidiary are to: • lead and oversee deployment of the internal control system (chair of the subsidiary’s internal control committee, procedure management, action plan follow-up), • carry out the second-level controls, • monitor and measure operational risks, • detect and prevent internal fraud and money laundering, • manage the local code of conduct system, • ensure efficiency of the business continuity plan, • manage the local compliance system.

Similarly, the Internal Control and Financial Risk Monitoring Department relies on designated oversight officers by function to watch over the internal control system within RCI Banque group divisions. The internal control role of these functional officers was redefined in 2004. Lastly, process owners have been designated and given responsibility for carrying out the first-level controls. Compliance officers have been named for each business area. Their role is to stay abreast of regulatory requirements, be a source of information about the rules, and validate new products in their area of responsibility. Information system security correspondents have also been named for each application area. They oversee:

23 Internal Control and Financial Security

• administration of system access authorizations (procedures, user This procedure, which establishes the model system that applies profiles and associated privileges), throughout the group, mainly covers: • compliance with regulatory requirements relating to data used by • the general internal control oversight system, the applications (personal and tax information), • the systems used locally by subsidiaries and affiliates, branches and • classification of applications to determine requirements in terms of joint ventures, confidentiality, availability. • the specific systems used in different functional areas.

Periodic control The overall internal control system of the RCI Banque group The person responsible for periodic control within the meaning of therefore comprises two types of controls and three levels at which Article 6b of CRBF Regulation 97-02 reports to the Corporate controls are applied: Secretary of RCI Banque and is independent of the ongoing control • Ongoing control: function. – First-level control: First-level controls consist of the self-monitoring procedures The Renault Group’s Internal Audit Department has been mandated followed by each department and each geographical unit. These by RCI Banque to perform the periodic compliance audits called for in entities are responsible for applying existing procedures in their Article 6b of that Regulation. It conducts these audits within the respective field of operations and for performing all controls specified different subsidiaries according to an annual audit plan validated by the by those procedures. First-level control is primarily operational Audit Committee, as part of general internal auditing or specific audit control performed by process owners. engagements focusing on a given area, such as acceptance or dealer credit risk. Internal audit findings are documented in reports and – Second-level control: recommendations sent to the Internal Control Committee. The Internal Control and Financial Risk Monitoring Department is responsible for oversight of second-level control, and the local 2.1.2.2. The Internal Control Committee has approved the internal controllers and oversight officers are responsible for general framework of the RCI Banque group’s internal control system implementation. Second-level control is carried out by means of as set down in a general internal control procedure. specialized systems that are independent of the operational units that conduct ongoing controls, to ensure that all transactions are proper and comply with Article 6a of CRBF Regulation 97-02.

• Third-level control (periodic): Third-level control is performed by independent oversight bodies (Renault Audit, supervisory authorities, independent auditors, etc.). It entails periodic verification of compliance as defined by Article 6b of CRBF Regulation 97-02.

2.1.3. OPERATIONAL FRAMEWORK

2.1.3.1. Three-year Plan and Budgeting/Forecasting/Reporting process Based on the objectives and directives set by senior management and on economic forecasts (macroeconomic indicators, exchange rates, pricing, markets), each group entity prepares a plan for the next three years that includes: • an action plan describing how it will fulfill its contribution to meeting objectives, • a quantitative projection of its real economic and financial indicators. This procedure is repeated annually as part of a rolling three-year plan. The group consolidates the input from the different entities. This enables it to check the financial results in the plan for consistency with the profitability and balance sheet targets set by

24 RCI BANQUE BUSINESS REPORT 2006

senior management and take corrective action if needed. to enable all staff members to determine what behavior is appropriate Budget development and organization of the forecast updating and in concrete and sometimes complex situations by referring to a few reporting processes are based on rules and tools to ensure that clear and precise principles. management receives reliable, usable information broken down by business segment (Retail, Enterprise, Dealer). 2.1.3.3. Internal control system assessment The RCI Banque group currently uses the following tools to evaluate 2.1.3.2. Internal control procedures and benchmarks its internal control system: The RCI Banque group has developed a general system of • operational risks mapping, which reveals how efficiently risk is procedures in accordance with CRBF Regulation 97-02. The being managed. This tool is part of the operational risk procedures applicable within the RCI Banque group are based on a management system, reference document (Procedure for procedures) and are available on • internal control barometer for second-level controls in the the RCI Banque intranet and other centralized media accessible to affiliates. This tool provides a standardized quantitative all users within the group. measurement of second-level control efficiency within the A new software tool for managing and updating the procedures is affiliates. currently undergoing trial; it is intended to enhance the existing Introduced in February 2005, it was used to make a first efficiency procedure centralization tool and ensure completeness of the group’s measurement in March 2005 and a second in November 2006. The procedures. The main business processes within RCI Banque -- results of these assessments are presented to the internal control acceptance, collections and delinquencies, refinancing, system committees of the group and the affiliates. security, physical asset security, risk monitoring, accounting, etc. -- Action plan monitoring tool. Following the improvement project are covered by procedures based on the principle of separation of conducted in 2005, software for monitoring action plans was powers. They establish channels for recommendations and approvals deployed in all the affiliated in 2006. This centralized database and ensure that decisions are made at the appropriate level with contains all of the action plans adopted by affiliates in response to appropriately implemented controls. findings of second-level or third-level controls. The software can link This applies both to the internal procedure memoranda and to the each control and action plan to macroprocesses and risk events in the investment project contract procedure for financial commitments operational risk map. Progress reports and progress indicators for and investments. audits and action plans are made available to all participants in the process, ensuring oversight and follow-through. Quarterly progress To comply with the amendments to Regulation 97-02, RCI Banque reports are provided to the Internal Control and Financial Risk is implementing: Monitoring Department. • a compliance control system integrated into the system for managing operational risk and monitoring the action plans laid out 2.1.3.4. Risk management in the 2006 statement of compliance policy. Credit and financial risks and the methods used to manage and This system entails defining the approval procedures for new control them, which follow the same organizational principles as products as well as the channels used and persons responsible for mentioned above, are described in detail in the sections of this monitoring regulatory developments. Compliance risks are to be business report dealing with financial risks and Basel II. gradually integrated into the operational risk monitoring system, The operational risk management system implemented by the RCI with reporting to the compliance officer. Banque group consists of the following three components: • a control system for outsourced activities.. This system entails • Operational risk mapping identifying essential outside services, inserting model clauses in Identifies major operational risks for assessment and management service contracts, and gradually bringing providers of essential purposes. services within the scope of second-level ongoing controls. • Incident database In accordance with Renault’s groupwide information system security Establishes a database to collect data on incidents of operational risk policy, RCI Banque is strengthening its IS security by implementing and produce oversight and management reports. action plans in areas such as administration of system access • Key risk indicators authorizations and business continuity. The policy is couched in Establishes leading indicators of operational risk, gathers data for terms of Cobit processes and is consistent with international these indicators, and produces oversight and management reports. standards for information system security. The first mapping of operational risks was deployed in the majority The RCI Banque group has adopted the Renault Code of Conduct of RCI Banque affiliates (representing 99% of loan assets) during and disseminated it in all of its affiliates. The purpose of this code is 2005. It is updated annually.

25 Internal Control and Financial Security

Collection of incident data began in 2006 for the same group of • Assets, liabilities and off-balance sheet items (receivables, affiliates, and deployment of operational risk indicators is being borrowings, derivatives, cash and equivalents, etc.) are periodically phased in so that all major macroprocesses will be covered by the end reviewed to reconcile the accounts with the group’s operational, of 2007. account validation and inventory systems. In addition, the group’s internal control and operational risk RCI Banque has had a business continuity plan since 2003. The management assessment system, described above objective of the plan is to ensure that RCI Banque is able to continue (see §2.1.3.3 and §2.1.3.4) applies to the process of preparing providing essential products and services in the event of a severe accounting and financial information. shock resulting from IT or telecommunication system outages, circumstances that render business premises unavailable, or events Effective linking of financial reporting to the group’s operational that deprive the group of a critical supplier’s service. systems is the keystone of the organizational scheme for preparing accounting and financial information. The group must rely on The back-up plan for the most vital functions, namely refinancing powerful, controlled information systems that can cope with the and other cash flows, has been in place since 2003 and is tested twice large volume of data to be processed, process that data to the a year. Continuity of critical functions in the four most important requisite quality standard, and meet ever-shorter deadlines for geographic areas (Germany, Spain, France and Italy) has been financial reporting to group management. assured since 2006. The first technical and user tests have demonstrated that the business continuity plans are operational. A 2.2.2 INFORMATION SYSTEMS AND ORGANIZATION project to extend the geographic scope of the back-up plan for critical functions will be launched in 2007. 2.2.2.1 Use of an integrated software package For accounting, the RCI Banque group has chosen to implement a 2.2. ORGANIZATION AND PREPARATION OF widely recognized software application (Enterprise Resource FINANCIAL AND ACCOUNTING INFORMATION Planning or ERP) and is deploying it gradually throughout the consolidated entities. This highly structured, integrated application The RCI Banque group prepares consolidated financial statements enables the group to implement its own internal control policies and using a single consolidation tool and a set of consolidation entries ensure data consistency and reliability. In particular, the ability to common to all entities. The consolidation tool generates accounting define and monitor user profiles helps in complying with rules and management reports from a single stream reporting system, governing separation of responsibilities. This software, combined thereby ensuring data consistency between the financial statements with a groupwide accounting interpretation tool, has been designed and the various in-house performance indicators. to incorporate the specific features of the group’s various activities through the use of different modules. 2.2.1 PREPARATION OF FINANCIAL STATEMENTS Reliability of financial and accounting information is ensured mainly The consolidating entity, RCI Banque, defines, manages and by controlling the basic transactions processed by the operational supervises the preparation of accounting and financial information. systems. Those systems feed data through interfaces to the Responsibility for preparing single-entity financial statements and groupwide accounting interpretation tool, which in turn transmits accounts restated for consolidation purposes lies with each the accounting translation of management events or inventory data subsidiary’s administrative and financial directors, acting under the to the ERP system. Deployment of the ERP financial and accounting authority of the subsidiary’s chairman and chief executive officer. modules across group entities has been carefully planned and will continue over the next few years. The following general policies govern financial statement preparation at all levels within the group: 2.2.2.2 Operational systems and control • All transactions must be accounted for and reconciled. Initial controls are performed via the major operational systems used • Transactions must conform to the accounting policies that govern for financing, service and refinancing transactions under the the entire group. A set of reference documents disseminated to all responsibility of the main lines of business (approval, collections/ group entities establishes measurement and presentation standards delinquencies, services, refinancing). The tools used for approval, as well as charts of account. These standards help to ensure finance and service contract management, customer and supplier consistency in the financial information that management receives. relationship management, administration of refinancing, purchase

26 RCI BANQUE BUSINESS REPORT 2006

in terms of change management, including training and groupwide simulations.

2.2.2.3 Role of accounting and management staff The accounting units of the affiliates and centralized support functions analyze the accounts and explain changes in financial data from one accounting period to the next, working in conjunction with the local and central management controllers, who analyze performance in comparison with budget and revised forecast data. If the analysis of budget or forecast variances or any other verification procedure reveals shortcomings in the quality of data from the associated accounting or operational system, action plans are implemented with the active involvement of line personnel and the Finance function to eliminate the root causes of the anomalies. order follow-up, and human resources management each entail its own specific control approach. They form part of the operational To complement this process with a view to enhancing the ongoing procedures used to manage physical and financial transactions, in reliability of financial information, an accounting control unit was compliance with group procedures for authorization and delegation established in 2005. The purpose of this unit is to ensure mastery of of powers. the accounting function within the affiliates by conducting assessments, offering advice and providing training. Since it was The financial and accounting teams play close attention to transfers formed, this unit has covered more than 80% of the consolidated of transaction data between the accounting systems and non- subsidiaries. The objective is for it to conduct control assignments at integrated operational systems. For example, at the group level: all of the affiliates on a twelve-month cycle. • account balances and movements are cross-checked against stock and flow data to ensure that data in the financing, services, 2.2.2.4 Publication of financial statements receivables and payables management systems are consistent, and The group publishes financial information for the six months ended any discrepancies are monitored, 30 June and for the full year ended 31 December. In anticipation of • similar cross-checks against the refinancing management systems these statements, pre-closings are performed twice a year, at 31 May are made for financial transactions, and the findings of these checks for the June statement and at 31 October for the December are analyzed, statement. Management then holds wrap-up meetings with the • invoices are checked against purchase orders and investments external auditors. recognized on the books to ensure consistency with the purchasing and capital expenditure tracking systems. RCI Banque prepares its consolidated financial statements in accordance with the International Financial Reporting Standards RCI Banque has adopted a groupwide operational accounting plan, (IFRS) published by the International Accounting Standards Board groupwide account-keeping standards, and an automated system that (IASB) for which a rule requiring adoption has appeared in the allows financial statements to be prepared in accordance with local Official Journal of the European Union by the statement closing standards at the same time. This system, which is supplemented by date. alternative accounting records kept under local standards, ensures data consistency in a context in which information must be Philippe GAMBA centralized and consolidated on tight deadlines The group’s consolidation tool was overhauled in a project conducted in 2005 to provide more complete monthly reporting with a shorter time lag. It was put into operation in early 2006. The new version of the tool delivers new functionalities, implements a new management scheme and incorporates process optimization features. Deployment of this tool has been accompanied by large-scale efforts

27 Auditors’ Reports

DELOITTE & ASSOCIÉS ERNST & YOUNG AUDIT Tour Ernst & Young 185, avenue Charles De Gaulle BP 136 Faubourg de l’Arche – 11, allée de l’Arche 92200 Neuilly-sur-Seine cedex 92037 Paris-La Défense Cedex S.A. with share capital of ?1,723,040 S.A.S. with variable capital

Statutory Auditor Statutory Auditor Member, Compagnie Régionale de Versailles Member, Compagnie Régionale de Versailles

RCI Banque S.A. audit procedures to assess the fairness of the information set out in Year ended 31 December 2006 the Chairman’s report on this subject.

Statutory Auditors’ report, prepared in accordance with Article These procedures consist, inter alia, in: L.225-235 of the French Commercial Code, on the report prepared • obtaining an understanding of the objectives and general by the chairman of the board of RCI Banque concerning internal organization of internal control, as well as the internal control control procedures relating to the preparation and processing of procedures relating to the preparation and processing of financial financial and accounting information. and accounting information, as set out in the Chairman’s report, • obtaining an understanding of the work underlying the information given in the report. To the shareholders: On the basis of these procedures, we have no observations to make In our capacity as statutory auditors of RCI Banque and in in connection with the information given on the internal control accordance with the Article L.225-235 the Commercial Code, we procedures relating to the preparation and processing of financial and present herewith our report on the report prepared by the chairman accounting information in the report of the chairman of the board of your company in accordance with Article L.225-37 of that Code prepared in accordance with Article L.225-37 of the Commercial for the year ended December 2006. Code.

It is for the Chairman to give an account in his report of the way in which the work of the board of directors is prepared and organized and internal control procedures are implemented within the company.

It is our responsibility to report to you any observations called for on Neuilly-sur-Seine and Paris-La Défense, 12 March 2007 our part regarding the information set out in the Chairman’s report on the internal control procedures for preparing and processing The Statutory Auditors financial and accounting information.

We have performed our review in accordance with the professional DELOITTE & ASSOCIÉS ERNST & YOUNG Audit guidelines applicable in France. These require us to perform certain Damien Leurent Micha Missakian

28 RCI BANQUE BUSINESS REPORT 2006

Risks

Basel II

COMPLIANCE WITH FUTURE CAPITAL ADEQUACY Implementation of the rating systems and estimation of the REGULATIONS “probability of default” and “loss given default” parameters, as required by the Basel II rules, is made easier by the group’s long The “Capital & Risks” (CARIS) project launched by RCI Banque in experience in statistical analysis, expert systems and modeling of February 2003 is responsible for achieving compliance with future expected recoveries on doubtful loans. capital adequacy regulations. Its main goals are to: Construction of the groupwide risk database will be completed in • implement internal ratings-based (IRB) approaches to credit risk 2007. This year will see not only production of the first regulatory assessment, reports but also the start of work to bring the UK subsidiary into the • deploy an operational risk monitoring, measurement and control internal rating system and implementation of the new FUSE system that complies with the requirements of the Basel II Accord; application for the Retail segment in France. The permanent and, governance system will likewise be implemented in 2007. • bring risk oversight and financial reporting systems into compliance with Pillars 2 and 3 of the future regulations. OPERATIONAL RISKS

This project is by nature highly cross-functional and The main objective of the “Operational risks” sub-project is to interdepartmental. It brings together representatives of all the implement a system to measure and monitor operational risks within various business lines and affiliates and is supported by the corporate RCI Banque. Although the group has preferred to use the standard departments in charge of risk oversight, mainly the Credit Risk method of calculating the regulatory capital requirement rather than Department, the Financial Management Department and the one of the advanced methods, the organization it has had in place Corporate Secretary’s office. Responsibility for implementation is since 2004 is tasked with giving RCI Banque efficient tools and entrusted to the leaders of the four sub-projects, “Credit Risks,” structures for overseeing operational risks. Under the leadership of “Operational Risks,” “Pillar 2” and “Pillar 3,” all under the wing of the Internal Control and Financial Risk Monitoring Department, a a single steering committee for the entire project. This steering detailed mapping of risks to key processes has been deployed in the committee reports to the Executive Committee. majority of the affiliates. This mapping exercise will be repeated each year with gradually expanded coverage of key processes. Two CREDIT RISKS additional components of the system, key risk indicators and collection of operational risk incidents in all of the affiliates, were Internal ratings by type of customer have been implemented in the implemented in 2006. With these instruments, the person Enterprise, Retail and Dealer segments. Currently, these ratings are responsible for each process will eventually be able to measure deployed in the four largest affiliates, which account for nearly 85% exposure to operational risk, take steps to cover it and reduce direct of RCI Banque’s consolidated loan outstandings. The systems will and indirect losses stemming from it. be adopted gradually by the other affiliates.

29 Risks

Operation and organization of the Credit Risk Department

The general missions of this department are to: Its main objectives for 2007 are to:

• ensure that the Group has an oversight and control system for • ensure the reliability of the new Retail, Enterprise and Dealer credit risk by providing standards, methods, management ratings as required by Basel II rules; processes, tools and indicators appropriate for each business • validate the central risk database; segment; • strengthen and expand the reach of RCI Banque’s benchmarks for • define and disseminate standards and methods, authorization levels effective management of the chain of risk in each customer and processes for monitoring and managing the chain of credit segment; risk; • assist in implementing risk chain management in new countries • provide support to the affiliates in implementing this system; where RCI Banque begins operations; • rule on requests for financing that exceed country authorizations; • deploy dealer financing operations in countries where this is a new • provide risk management expertise in developing procedures to business for Alliance brands. meet Basel II rules and, once those procedures have been developed, implement and be accountable for them.

Credit risk management organization

DIRECTOR OF CREDIT RISK

Enterprise Credit Risk and Dealer Credit Risk Retail Credit Risk and Credit Commitments Basel II Project department department Scoring department department

30 RCI BANQUE BUSINESS REPORT 2006

Credit risk

In the automobile market in Europe, margins came under strong CUSTOMER RISK pressure in 2006, making it a difficult year for financing of Renault and Nissan dealers. RCI Banque was nevertheless able to contain its In 2006 the cost of risk in the Retail segment was 0.67% of average risk during the year thanks to its fine-grained analysis of dealers’ performing loans outstanding, compared with 0.88% in 2005. The financial condition. For customer financing, on the other hand, the strong measures taken in Germany between 2004 and 2005 to climate reverted to more neutral macroeconomic conditions in terms tighten lending procedures and policies have now brought customer of credit risk, whereas 2005 had been a difficult year in some major risk under control in the group’s second-largest market. In that markets such as Germany. country, the cost of customer risk has come down from 1.44% in 2005 to 0.87% in 2006 and will continue to improve in the future. From the standpoint of risk management methods, the Credit Risk In France, the cost of customer risk fell to 0.4% and is back to the department completed its work on defining and updating groupwide level of its historical lows. internal rules. The “master procedures,” currently in the process of Doubtful loan amounts were stable, while the provisioning rate being transposed in each country, now cover all the various risk edged up to 72% in 2006 from 70% one year earlier. management processes (rating, approval, loan administration, collections, reporting) for each market segment, Retail, Enterprise DEALER RISK and Dealer. Deployment is already at an advanced stage in the most significant affiliates in terms of outstandings and in those countries The cost of risk on Dealer financing was 0.42% of average where RCI Banque has started up lending operations by relying outstandings, reflecting the deterioration in financial condition at a directly on Group standards (customer financing in Korea and number of large dealers, especially in Germany and the United Poland, dealer financing in Slovenia). Kingdom. This systematic work on risk processes and risk containment, coupled with reorganizations in certain countries (such as centralization of Cost of risk on average loan outstandings (%) the collections process in France) and more selective acceptance policy in certain markets (such as the Enterprise segment in Customers Dealers Total Germany), bore fruit in 2006. 2005 2006 2005 2006 2005 2006 France -0.70% -0.40% -0.46% -0.26% -0.64% -0.37% The standardization and mastering of risk management processes Rest of World -0.95% -0.76% -0.02% -0.48% -0.75% -0.70% Total -0.88% -0.67% -0.19% -0.42% -0.72% -0.61% provides a solid foundation for the Basel II IRBA (internal ratings based approach) that RCI Banque is in the process of implementing. Internal rating systems that, for example, assign a probability of Doubtful loans as % Provisioning rate default (PD) and calculate expected loss (LGD) based on credit of Customer loan outstandings on doubtful loans scores and borrower behavior, now represent tools of great precision in the group’s most significant markets. 2005 2006 2005 2006 For the RCI Banque group as a whole, the aggregate cost of risk in France 3.83% 3.90% France 65.2% 65.0% 2006 was 0.6% of average performing loan outstandings, an Rest of World 3.01% 3.02% Rest of World 72.6% 75.7% improvement of 0.1 percent from the previous year. Total 3.29% 3.31% Total 69.9% 71.6%

31 Risks

Financial risks

Essentially all of the transactions in financial instruments carried out finance affiliates of the RCI Banque group, including those for which by the RCI Banque holding company are related to its function as refinancing is not done centrally. centralized refinancing office for the group. All refinancing for affiliates in countries with a rating of less than A is done locally to avoid any cross-border risk. These affiliates are In this role, RCI Banque pursues its objectives through two main subject to the same financial risk requirements as other affiliates of strategies: the group: they must observe limits on interest-rate risk, monitor • It obtains the funds required to ensure continuity of group’s their liquidity risk, manage their currency risk prudently, contain consolidated affiliates business operations by borrowing under its their counterparty risk, and have in place a dedicated risk monitoring own name, via such means as issuance of money-market committee as well as a means of ad hoc reporting on financial risks. borrowings, bonds and other debt securities, securitization of RCI Banque does not engage in proprietary trading. receivables, and negotiation of confirmed credit lines, and it makes cash available to group companies; FINANCIAL RISK MANAGEMENT • It manages and minimizes exposure to the risk linked to its ORGANIZATION affiliates’ sales financing activities through interest-rate swaps, currency swaps and spot and forward foreign exchange The financial risk management system which is part of the RCI transactions. Banque group’s overall internal control system operates according to rules approved by the Renault Group. RCI Banque’s Finance The scope of the group’s financial policy extends to all of the sales department is responsible for managing market risks arising from

RCI Banque group: Exposure to interest-rate risk at 31 December 2006 in millions of euros

Germany Argentina Austria Belgium Brazil Korea Spain France NFCB GBRFS Italy Netherlands Portugal Czech RomaniaReÞnancing Switzerland Poland Republic companies (1) The affiliate is a 50/50 joint venture with HBOS. Agreement with the partner to cancel the transactions that give rise to the excess cover could not be reached before January 2007. 32 RCI BANQUE BUSINESS REPORT 2006

interest-rate, liquidity and currency exposures and for verifying (refinancing subsidiaries, French subsidiaries, foreign affiliates) so compliance with allowable limits at the consolidated group level. The that aggregate interest-rate risk can be managed at the RCI Banque rules and ceilings are specified and approved by Renault as the group level. shareholder. They are set out in periodically updated internal • RCI Banque group’s sensitivity to interest-rate risk at 31 procedure memoranda. Foreign exchange instruments, interest-rate December 2006 stood at N3.437m. instruments and currencies approved for use in managing market risks are specified on a list of authorized products validated by RCI Throughout the year, it was held below the ?13m limit set by the Banque’s Finance Committee. group. • The sensitivity of the commercial loan portfolio, which is MANAGING AGGREGATE INTEREST-RATE, systematically hedged, is followed on a daily basis. CURRENCY, COUNTERPARTY AND LIQUIDITY • The goal is for each affiliate to protect its gross margin by hedging RISK its interest-rate risk exposure.

Interest-rate risk However, the affiliates do have some flexibility in hedging their exposure owing to the difficulty of exactly matching the term • Interest-rate risk is inherent in the business of the group. structures of their borrowings and customer loans. • Almost all of RCI Banque’s customer loans are made at fixed rates • The Internal Auditing and Financial Risk Monitoring Department for terms ranging from 1 to 72 months. calculates asset/liability sensitivities for the whole group on a daily Sensitivity calculations are made by currency and by entity basis.

RCI Banque group: Daily interest-rate sensitivity, 2006 in millions of euros

Dec 05 Jan 06 Feb 06 Mar 06 Apr 06 May 06 Jun 06 Jul 06 Aug 06 Sep 06 Oct 06 Nov 06 Dec 06

33 Risks

Financial risks

Each entity’s position with respect to its risk limit is checked daily, The sales finance affiliates are in general required to refinance in their and affiliates are required to hedge immediately when necessary. local currency and thus have no foreign exchange exposure. The findings are reported monthly to the Finance Committee, which Exceptionally, however, the Romanian and Hungarian affiliates, verifies that they comply with applicable policies. which finance and refinance in multiple currencies, have been allowed a limit of ?1 million each. The Korean affiliate, which does Currency risk the same, has been allowed a limit of ?0.1 million. As a result, the Renault Group has raised the limit on consolidated • The RCI Banque holding company’s foreign exchange exposure foreign exchange exposure of RCI Banque to ?5 million. remained below ?3m throughout the year. At 31 December 2006, • Temporary residual foreign currency positions may arise from the foreign exchange exposure of the consolidated RCI Banque unavoidable timing differences in multiple-currency cash group was likewise below ?3m. management. Such positions are monitored daily and may be • No net foreign exchange position is allowed on refinancing hedged if necessary. operations: all foreign currency cash flows are systematically • All other currency transactions, including hedging of expected hedged by the trading desk. dividends, must be approved by the Chief Financial Officer.

RCI Banque group: Liquidity position at year-end 2006 in millions of euros

APPLICATIONS OF FUNDS SOURCES OF FUNDS

8 8 9 7 7 7 7 7 7 7 8 0 8 0 8 0 9 6 7 0 7 0 7 0 0 7 0 7 0 0 8 8 0 l 0 0 8 8 8 8 8 9 9 9 l 9 0 9 9 0 0 0 il 0 0 0 v 0 0 r ri y e 0 0 0 0 0 0 0 0 ri 0 0 0 c n b r r y e ly g p t c n a a n ly g p t v c r y e y g e a e a p a n u u e c o e a b p u u u e c o e n b a p a n l u D J F M A M Ju J A S O N D J Fe M A M J J A S O N D Ja Fe M A M Ju Ju A

34 RCI BANQUE BUSINESS REPORT 2006

Counterparty risk Liquidity risk

• Counterparty risk is managed by a system of limits set for the • RCI Banque must at all times, and especially under adverse Renault Group as a whole and monitored daily. The risk-tracking conditions, have sufficient financial resources to ensure the results are provided monthly to the RCI Banque Finance ongoing development of its business. To this end, it has adopted Committee and incorporated into the monitoring of consolidated stringent internal liquidity standards. counterparty risk of the Renault Group. • To meet this liquidity objective, at year-end 2006, RCI Banque • As a structural borrower of funds, RCI Banque’s exposure to had more than ?5.3bn in unutilized confirmed lines of credit as counterparty risk arises mainly on transactions in derivatives. well as broadly diversified short-term and medium-term issuance • Counterparties to market transactions are selected from among programs. RCI Banque also held some ?1.3bn of receivables banking entities operating in the French and international markets. eligible as central bank collateral (excluding receivables already in A limit is set for each institution based on an internal rating system use to secure financing at year-end). that is applied for the Renault Group as a whole. • In order to diversify RCI Banque’s sources of funds and limit the • Placements are of marginal importance and are authorized only amounts obtained from any single counterparty, the trading desk subject to tight restrictions. Exposures on derivatives are weighted has developed relationships with a large number of banks and using coefficients more conservative than those recommended by financial intermediaries in France and abroad. regulators. Delivery-versus-payment risk on foreign currency • Diversification of funding sources was enhanced in 2006 by two transactions is closely monitored and subject to specific limits. new securitization transactions. The first, in July 2006 for ?666m, securitized a portion of dealer financing receivables in Germany. The second, in October 2006, securitized ?1.8bn of Diac loan receivables. It was a follow-up to the first securitization of Diac loans, which took place in 2002. • The group’s consolidated liquidity position and projected cash requirements are monitored on an ongoing basis, and reports are presented to the Finance Committee every month. Cash requirements are calculated on the basis of issued resources, unutilized confirmed bank credit facilities, the potential amount eligible for monetary policy transactions of the European System of Central Banks (ESCB), and existing commercial and financial assets.

35 Risks

Risks on residual values

The total risk on residual values borne by RCI Banque has decreased 2006 was notable for: by 33% from 2005. • the disposal of the Enterprise business in Netherlands, • a decline in Retail lending business in the United Kingdom.

Breakdown of risk related to residual values Risk related to residual values not carried by RCI Banque

Residual Provision for Residual values values residual values

in millions of euros 2006 2005 2004 2006 2005 2004 in thousands of euros 2006 2005 2004

Enterprise segment: 222 333,1 382,9 21,9 26,4 23,2 Entreprise and Retail segments : France 0,9 3,1 12 0,5 0,5 1,1 European Union Commitments received (excluding France) 221,1 330 370,9 21,4 25,9 22,1 from Renault Group 1,011 636 571 Europe Commitments received from others (excluding E.U.) 00 0000 (dealers and customers) 1,649 1,706 1,537 Retail segment: 201,8 301,4 316,8 1,5 2,2 1,5 European Union (excluding France) 201,8 301,4 316,8 1,5 2,2 1,5 Total 2,660 2,342 2,108

Total risk related to residual value 423,8 634,5 699,7 23,4 28,6 24,7

Insurance

PROPERTY & CASUALTY, BUSINESS INTERRUPTION AND CIVIL LIABILITY

RCI Banque’s French companies are affiliated with the Renault The RCI Banque group’s foreign affiliates negotiate coverage with Group’s worldwide program of insurance against property damage local insurance companies. However, group policy is now to review and business interruptions. the insurance situation to identify any weaknesses in coverage and Self-insurance is a significant component of this program because optimize the cost of these local policies. deductibles are high for each type of coverage (?20,000 for property Civil operating liability (officer’s liability) of the French affiliates is damage and three days of production for business interruptions). covered under a policy taken out by the RCI Banque group with a The self-insurance component entails a risk prevention policy rider extending professional liability coverage to those business through: activities in which such coverage is necessary (long-term rentals and • implementation of effective safety and security systems, vehicle fleet management services) or mandatory (insurance • staff training to heighten employees’ awareness of their role in brokerage). preventing damage to property, Most of the foreign affiliates obtain professional and operating • installation of back-up facilities to keep operations going, inasmuch liability coverage from local insurance companies. as the production by the group depends heavily on properly functioning IT systems.

36 - y r a r b i L o t o h P n a s s i N / t l u a n e R - n i n n a J s i o ç n a r F : s t i d e r c o t o h P

RCI Banque - S.A. with share capital of EUR 100,000,000 Registered office: 14, avenue du Pavé-Neuf, 93168 Noisy-le-Grand Cedex - France Siren 306 523 358 RCS Bobigny Telephone: +33 1 49 32 69 99 - Fax: +33 1 49 32 86 15 - www.rcibanque.com Management report 2006

RCI BANQUE MANAGEMENT REPORT 2006

Auditors’ Reports

Statutory Auditor Statutory Auditor Member, Compagnie Régionale de Versailles Member, Compagnie Régionale de Versailles

RCI BANQUE, SA Accounting policies Year ended 31 December 2006 Paragraph 2-N of the consolidated financial statements describes the accounting policies applied to interest-rate derivatives and other Statutory auditors’ report hedging instruments. In conducting our assessment of the accounting on the consolidated financial statements rules and policies applied by your company, we verified the appropriateness of the accounting methods referred to above, the To the shareholders: application of those methods, and the information provided in the notes to the consolidated financial statements. In compliance with the assignment entrusted to us by your shareholders’ meetings, we have audited the accompanying Accounting estimates consolidated financial statements of RCI Banque for the year ended As described in paragraph 2-D of the consolidated financial 31 December. These consolidated financial statements have been statements, your company sets aside allowances to cover the credit approved by the Board of Directors. Our role is to express an opinion risks inherent in its business operations. on these financial statements based on our audit. As part of our assessment of the significant estimates used in preparing the consolidated financial statements, we reviewed the processes 1 – OPINION ON THE CONSOLIDATED FINANCIAL implemented by management to identify and assess these risks and to STATEMENTS determine the extent of their coverage by allowances or provisions on the asset or liability side of the balance sheet. We assessed the analysis We conducted our audit in accordance with the professional standards of risks incurred based on a sample of individual borrowers and, for a applicable in France. Those standards require that we plan and sample of portfolios evaluated collectively, the data and variables used perform the audit to obtain reasonable assurance as to whether the by the company in documenting its estimates. financial statements are free of material misstatement. An audit These assessments were made as part of our audit of the consolidated includes examining, on a test basis, evidence supporting the amounts financial statements taken as a whole and therefore contributed to the and disclosures in the financial statements. An audit also includes formation of the unqualified audit opinion expressed in the first part assessing the accounting policies applied and significant estimates of this report. made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a 3 – SPECIFIC VERIFICATION reasonable basis for our opinion. In our opinion, the consolidated financial statements for 2006, as We also verified, in conformity with the professional standards prepared under IFRS as adopted in the European Union, give a true applicable in France, the information provided in the Group’s and fair view of the assets, liabilities, financial position and results of management report. We have no observations to make regarding fair the group of entities included in the consolidation. presentation and conformity of the management report with the consolidated financial statements. 2 – JUSTIFICATION OF OUR ASSESSMENTS Neuilly-sur-Seine and Paris-La Défense, 12 March 2007 In accordance with the requirements of Article L. 823-9 of the The Statutory Auditors French Commercial Code relating to justification of our assessments, DELOITTE & ASSOCIES ERNST & YOUNG AUDIT we bring to your attention the following matters: Damien Leurent Micha Missakian 1 Consolidated financial statements RCI Banque group

Consolidated balance sheet

(in millions of euros) ASSETS Notes 12/2006 12/2005 Cash balances with central banks and PCAs 448 753 Derivatives 2 186 177 Financial assets available for sale and other financial assets 31125 Amounts receivable from credit institutions 4 555 1,031 Loans and advances to customers 5, 6 23,074 23,294 Operating lease transactions 5, 6 307 435 Adjustment accounts – Assets 7 448 511 Interests in associates 81513 Tangible and intangible non-current assets 94041 Goodwill 10 37 37

Total assets 25,121 26,317

LIABILITIES AND EQUITY Notes 12/2006 12/2005 Derivatives 2 117 179 Amounts payable to credit institutions 11 3,957 4,683 Amounts payable to customers 11 622 563 Debt evidenced by certificates 11 16,586 17,515 Adjustment accounts – Liabilities 13 1,045 945 Provisions 14 109 104 Subordinated liabilities 16 271 267 Equity 19 2,414 2,061 - Equity – group shareholders 2,409 2,056 Share capital and attributable reserves 814 814 Consolidated reserves and other 1,201 903 Unrealized or deferred gains and losses 89 28 Net income for the year 305 311 - Equity – minority interests 55 Total liabilities & equity 25,121 26,317

OFF-BALANCE-SHEET ITEMS, GUARANTEES, REFINANCING COMMITMENTS Notes 12/2006 12/2005 Commitments given 20 2,613 2,156 Financing commitments 2,478 2,103 Guarantee commitments 1- Commitments on securities 115 - Other commitments given 19 53 Commitments received 20 10,131 9,330 Financing commitments 5,624 5,679 Guarantee commitments 4,411 3,601 Commitments on securities 55 - Other commitments received 41 49

2 RCI BANQUE MANAGEMENT REPORT 2006

s RCI Banque group

Consolidated income statement

(in millions of euros) Notes 31/12/2006 31/12/2005 Interest and similar income 21 1,779 1,765 Interest expense and similar charges 22 (878) (856) Fee and commission income 35 27 Fee and commission expense (14) (7) Net gains (losses) on financial instruments through profit or loss 23 (1) 6 Net gains (losses) on AFS securities and other financial assets 24 3 1 Net income (expense) of other activities 25 95 66

NET BANKING INCOME 1,019 1,002 General operating expenses 26 (380) (378) Depreciation and impairment losses on tangible and intangible assets (11) (11)

GROSS OPERATING INCOME 628 613 Cost of risk 27 (141) (159)

OPERATING INCOME 487 454 Share of net income of equity method companies 85 2 Gains less losses on non-current assets (1) 1

PRETAX INCOME 491 457 Income tax 28 (180) (145)

NET INCOME 311 312 Net income attributable to minority interests 61 Net income attributable to Group shareholders 305 311

Earnings per share, RCI group share in euros 305,34 311,49

3 Consolidated financial statements RCI Banque group

Consolidated statement of changes in equity

Share capital and Unrealized/deferred reverses attributable reverses gains /losses (net of tax)

Chg in fair Net Equity – Share Attributable Consolidated Translation value of income Equity – minority Total capital reserves reserves adjustments hedging group group interests consolidated (1) (2) (3) (4) instruments share share (6) equity (in millions of euros) (5)

Equity at 31 December 2004 100 714 821 (1) (45) 266 1,856 5 1,861 Appropriation of net income of prior year 266 (266) - -

Equity at 1 January 2005 100 714 1,087 (1) (45) - 1,856 5 1,861 Dividend for the year (voted in 2005) (180) (180) (180) Subtotal – Movements attributable to relations with shareholders 100 714 907 (1) (45) - 1,676 5 1,681 Change in value of financial instruments and non-current assets recognized in equity 50 50 50 Change in value of financial instruments and non-current assets recognized in the income statement 222 Net income for the year (before appropriation) 311 311 1 312 Subtotal - - - - 52 311 363 1 364 Other changes (4) 15 7 18 (1) 17 Equity at 31 December 2005 100 714 903 14 14 311 2,057 5 2,062 Appropriation of net income of prior year 311 (311) - -

Equity at 1 January 2006 100 714 1,214 14 14 0 2,057 5 2,062 Dividend for the year (voted in 2005) - - (1) (1) Subtotal – Movements attributable to relations with shareholders ------(1) (1) Change in value of financial instruments and non-current assets recognized in equity 60 60 60 Change in value of financial instruments and non-current assets recognized in the income statement - - Net income for the year (before appropriation) 305 305 6 311 Subtotal - - - - 60 305 365 6 371 Effect of acquisitions, disposals, and change in share capital (7) (3) (3) 23 20 Commitment to buy out minority interests (cf. Note A) (10) (10) (27) (37) Change of accounting methods Other changes 1 1 (1) 0 Equity at 31 December 2006 100 714 1,201 15 74 305 2,409 5 2,414

(1) The share capital of RCI Banque SA consists of 1,000,000 fully paid shares with par value of 100 euros each, of which 999,993 shares are owned by Renault s.a.s. (2) Attributable reserves include the share premium account of the parent company. (3) The distribution for 2005 was an advance dividend. No dividend has been paid for 2006 except on the minority interest in Cogera. (4) The change in translation adjustments at 31 December 2006 relates primarily to Switzerland, Mexico, and the United Kingdom. At 31 December 2005, the change related primarily to Brazil, the United Kingdom, and Mexico. (5) Includes changes in fair value of derivatives used as cash flow hedges. (6) Minority interests at 31 December 2006 consisted essentially of the equity interest in Cogera held by Renault s.a.s. (7) As required under accounting rules, goodwill realized on the buy-out of minority interests in RCI Leasing Romania SRL was recognized in equity as a decrease in consolidated reserves.

4 RCI BANQUE MANAGEMENT REPORT 2006

s RCI Banque group

Consolidated cash flow statement

(in millions of euros) 31/12/2006 31/12/2005

Net income attributable to group shareholders 305 311 Depreciation and amortization of tangible and intangible non-current assets 911 Net allowance for impairment and provisions 971 Share of net income of associates (5) (2) Deferred tax (income) / expense 11 17 Net loss / gain from investing activities (1) (6) Income attributable to minority interests 6 1 Other (gains/losses on derivatives at fair value through profit and loss) 1 (5) Cash flow 341 398 Other movements (accrued receivables and payables) 7 (29) Total non-monetary items included in net income and other adjustments 43 369 Cash flows on transactions with credit institutions (806) 467 - increases / decreases in amounts receivable from credit institutions (9) 7 - increases / decreases in amounts payable to credit institutions (797) 460 Cash flows on transactions with customers 643 (1,100) - increases / decreases in amounts receivable from customers 591 (1,127) - increases / decreases in amounts payable to customers 52 27 Cash flows on other transactions affecting financial assets and liabilities (916) 1,353 - inflows / outflows related to AFS securities and similar -1 - inflows / outflows related to debts evidenced by certificates (1,017) 1,319 - inflows / outflows related to collections 101 33 Cash flows on other transactions affecting non-financial assets and liabilities (28) (44) Net decrease / (increase) in assets and liabilities resulting from operating activities (1,107) 676 Net cash generated by operating activities (A) (759) 1,045 Flows related to financial assets and investments 1 (30) Flows related to tangible and intangible non-current assets (10) (5) Net cash from / (used by) investing activities (B) (9) (35) Net cash from / (to) shareholders (8) (579) Outflows related to repayment of equity instruments and subordinated borrowings - (392) Dividends paid (1) (180) Buy-out of minority interests (7) (7) Other net cash flows related to financing activities - 250 Inflows / outflows on subordinated debt - 250

Net cash from / (used by) financing activities (C) (8) (329) Effect of changes in exchange rates and scope of consolidation on cash and cash equivalents (D) 99 Net increase / (decrease) in cash and cash equivalents (A + B + C + D) (767) 690 Cash and cash equivalents at beginning of year 1,590 900 Cash and balances at central banks and PCAs 753 408 Balances in sight accounts at credit institutions 837 492 Cash and cash equivalents at end of year 823 1,590 Cash and balances at central banks and PCAs 448 753 Credit balances in sight accounts with credit institutions 541 1,031 Debit balances in sight accounts with credit institutions (166) (194) Change in net cash (767) 690

Cash and cash equivalents consist of sight deposits and overnight funds. The items included in this line item are presented in Notes 4 and 11.

5 RCI BANQUE MANAGEMENT REPORT 2006

al statements

negligible impact on the consolidated statements, inasmuch as any these options. losses of these vehicles are recognized by means of impairment As required by IAS 32, the group has recognized a liability arising allowances. Significant transactions between companies of the group from put options sold to minority shareholders of exclusively are eliminated, as are unrealized intercompany profits. controlled entities. This liability is measured initially at the present value of the estimated exercise price of the put options. For the most part, the companies included in RCI Banque’s scope of consolidation are the Renault, Nissan and Dacia sales finance The counterpart entries for this liability are recorded as decreases in companies and the associated services companies. the minority interests underlying the options and, for the balance, a decrease in equity attributable to group shareholders. The Acquisition cost of shares and goodwill requirement to recognize a liability even though the put options have not been exercised leads, for consistency, to applying the same The acquisition cost of shares is the amount paid by the acquirer to accounting treatment initially as that applied to increases in the the seller plus incidental expenses directly attributable to the group’s proportionate interests in controlled entities. acquisition, net of any associated tax savings. Upon expiration of this obligation, the entries made previously are Goodwill is the difference between the cost of acquisition adjusted reversed if the options have not been exercised. If the options are for directly attributable expenses and the fair value of the assets and exercised and the buy-out is effected, the amount recognized as a liabilities acquired. If the difference is negative, the amount of the liability is extinguished by the cash outlay associated with the buy-out difference is recognized immediately in the income statement. of the minority interest.

Goodwill relating to fully or proportionately consolidated companies B) Presentation of the financial statements on the balance sheet of RCI Banque is not amortized, but is subject to an impairment test performed at least annually and whenever there The summary statements are presented in the format recommended is an indication of a loss in value. by the Conseil National de la Comptabilité in its Opinion 2005-07 of 21 June 2005. Goodwill is therefore measured at cost less any accrued impairment Operating income includes all income and expense directly associated losses. If impairment is found, the impairment loss is recognized in with RCI Banque group operations, whether these items are the income statement. Goodwill recognized upon buy-out of recurring or result from one-time decisions or transactions, such as minority interests in companies that were previously fully restructuring costs. consolidated is accounted for as a decrease in consolidated reserves. C) Estimates and judgments Minority interests In preparing its financial statements, RCI Banque has to make The RCI Banque group has made commitments to minority estimates and assumptions that affect the book value of certain assets shareholders of certain fully consolidated subsidiaries to buy out their and liabilities, income and expense items, and the information holdings. For the group, these buy-out commitments represent disclosed in certain notes. RCI Banque regularly revises its estimates contractual obligations arising from the sales of put options. The and assessments to take account of past experience another factors exercise price of these options is determined by estimating the price deemed relevant in view of economic circumstances. If changes in the RCI Banque group will have to pay to the minority holders if the these assumptions or circumstances are not as anticipated, the figures options are exercised, taking into account future returns on the reported in RCI Banque’s future financial statements could differ financing portfolio as it existed at the closing date and provisions in from current estimates. The recoverable value of loans and advances the cooperation agreements concerning the subsidiaries. to customers and allowances for impairment and provisions are the principal items that depend on estimates and assumptions. Pending issuance of an IASB standard or IFRIC interpretation on the subject, the group has applied the following accounting treatment to 7 Notes to the consolidated financial statements

D) Loans and advances to customers • A groupwide rating for bank counterparties, which is established on and finance lease contracts the basis of external ratings and the level of capital for each counterparty, Measurement (excluding impairment) and presentation • for Enterprise borrowers, each affiliate uses its own risk assessment method based on a combination of credit scores, financial analyses, Sales financing receivables from end customers and dealer financing external ratings and expert systems, receivables come under the category of “Loans and advances issued • for Retail borrowers, various acceptance scoring systems are used; by the company.” As such, they are initially recorded at fair value and these vary by affiliate and by type of financing. carried at amortized cost calculated according to the effective interest rate method. Whenever full or partial collection of a receivable is in doubt, that The effective interest rate is the internal rate of return to maturity or, receivable is classified in one of the following two categories: for adjustable-rate loans, the nearest rate adjustment date. The • Doubtful loans: a receivable is classified as doubtful not later than discounted amount of amortization on any difference between the when it is unpaid for more than three months. When a receivable is initial loan amount and the amount payable at maturity is calculated classified as doubtful, the entire amount of credit outstanding to the using the effective interest rate. customer concerned is transferred to the doubtful loan category. • Compromised loans: a receivable is classified as compromised when In addition to the contractual component of the receivable, the the counterparty is declared in default on a loan or when a lease amortized cost of finance receivables includes interest subsidies agreement is terminated due to deterioration in the counterparty’s received from the car maker or dealer, loan handling fees paid by financial position. If there is no formal default or termination, the customers and commissions paid to referrers. These items, which are receivable is transferred to this category not later than one year after a factor in the return on the loan, are either deducted from or added it was classified as doubtful. to the amount receivable. They are recognized in the income statement as a pro-rated portion discounted at the effective interest Because local management practices vary by country, default or rate for the receivables to which they apply. termination occurs after different periods of time in the several countries where the RCI Banque group operates. However, local Finance lease contracts, as identified by the rules described in part E practices are similar in the major geographical regions: below, are in substance booked as sales financing receivables. • Northern Europe: default or termination generally takes place within three to four months following the first unpaid installment. Income from the resale of vehicles at the end of finance lease • Southern Europe: default or termination generally takes place within contracts is classified under “Net income/(expense) of other eight to twelve months following the first unpaid installment. activities.” As a result, gains and losses on the resale of vehicles • South America: default or termination generally takes place at the coming off performing lease agreements, amounts charged to or end of the fifteenth month following the first unpaid installment, recovered from allowances for risks on residual values, and gains or when the loan is written off. losses resulting from damage to vehicles less any corresponding insurance settlements are recorded under “Other income related to Cancellation fees and late interest on doubtful and compromised banking operations” and “Other expenses related to banking loans are recognized only when received. operations.” A doubtful loan is reclassified as a performing loan once all overdue Determination of credit risk amounts have been paid.

The RCI Banque group currently uses a number of different internal Risk reduction factors rating systems: • a groupwide rating for borrowers in the Dealer segment, which is The RCI Banque group disposes of certain doubtful receivables via used in the various phases of the relationship with the borrower factoring. This practice is limited and applies only in specific (initial approval, risk monitoring, provisioning), locations. 8 RCI BANQUE MANAGEMENT REPORT 2006

al statements

Impairment receivables found upon case-by-case review to be associated with an objective impairment indicator are classified separately from other non- Impairment allowances are established to cover risks of non-recovery. doubtful receivables in the delinquent loan category created for this The amount of these allowances is determined on an individual basis, purpose. Deterioration in the borrower’s financial condition, either case by case or via statistical risk analysis, or on a collective basis. profitability or payment pattern will trigger reclassification of the These impairment allowances are recorded on the asset side of the receivable as delinquent and a consequent impairment charge. balance sheet as deductions from the asset items with which they are Delinquent receivables are written down by an impairment charge associated. based on the impairment ratio for doubtful loans weighted by the percentage of delinquent receivables that subsequently become Retail lending doubtful.

A statistical approach is applied on loans to individual consumers. The Based on information available on the individual borrower, write- aim is to estimate ultimate losses on doubtful loans, compromised loans downs for delinquent receivables may also be based on an expert and loans with missed or late payments. Retail loans are grouped into appraisal. risk classes representative of the type of financing and property financed. Non-doubtful receivables reviewed on a case-by-case basis and found not to be associated with an objective impairment indicator are The projected cash flows used for statistical estimation of impairment classified as performing loans. They are subject to a collective review are calculated by applying a periodic recovery factor based on the age of credit risk as assessed for the sector. In each country where RCI of the receivable to the amount owed at the time of default. Recovery Banque provides dealer financing, the long-term macroeconomic cash flows are projected over several years, and the last flow at the end factors that explain risk on dealer financing operations are identified of the period represents a lump-sum value of recoveries beyond that and correlated with historical losses. When the identified period. The recovery factors are based on actual collections macroeconomic indicators show a degradation suggesting an increase experience smoothed over a period of twelve months. in risk, the impairment allowance for the performing loan portfolio as a whole is adjusted accordingly. The impairment ratio reflects the loss The impairment allowance for doubtful loans is calculated by ratio associated with the observed degradation. comparing the estimated recoverable value, which consists of discounted projected collections, with the carrying value of the loans. Enterprise financing Because the statistical method is used to measure projected collections, estimated recoverable value is not calculated on a case-by- Enterprise receivables are provisioned individually using the same case basis for each loan but on a collective basis for a given generation statistical approach applied to retail receivables, in so far as this of loans. Impairment charges on loans that are overdue but not approach is relevant. If not, impairment allowances for doubtful doubtful are determined as a function of the probability that the loans amounts are determined on a case-by-case basis, according to the will be reclassified as doubtful and the recovery factor that will apply classification of the debtor company and the stage reached in if they are. collections or other proceedings.

Dealer financing A portfolio approach has been implemented for performing receivables, without material impact on RCI Banque’s financial For the largest receivables, impairment allowances for doubtful statements. amounts are determined on a case-by-case basis, according to the classification of the debtor company and stage reached in collections Retail and Enterprise financing or other proceedings. Interest accrued and receivable on doubtful loans is provisioned in For non-doubtful receivables, an approach based on case-by-case full. The impairment allowances are deducted from the corresponding review and collective review of credit risk is used. Non-doubtful interest income items. 9 Notes to the consolidated financial statements

Country risk This impairment charge is arrived at by comparing: Allowances for country risks are determined as a function of: a) the economic value of the contract, meaning the sum of future cash • the estimated risk of non-transfer associated with the future flows under the contract plus the re-estimated residual value at solvency of each country included in the base subject to potential market conditions on the measurement date, all discounted at the impairment; contract interest rate, • the systemic credit risk to which debtors are exposed in the event of b) the carrying value on the balance sheet at the time of continued, persistent deterioration in economic conditions and measurement. general situation of the countries included in this base. The projected resale value is estimated by taking into account known The procedure for calculating country risk allowances to cover recent trends in the market for second-hand vehicles, which may be transfer risk and systemic credit risk on amounts receivable from influenced by external factors, such as economic conditions and customers incorporates the notion of “loss event” evidenced by taxation, as well as by internal factors, such as changes in the model deterioration in macroeconomic indicators such as Standard and range or a decrease in the car maker’s prices. The impairment charge Poor’s rating of the country, the country’s unemployment rate, its is calculated with no allowance for any profit on resale. external debt as a percentage of GDP, and its rolling 12-month inflation rate). E) Operating leases (IAS 17) On the balance sheet, impairment allowances are booked as deductions from the carrying value of loans and advances to In accordance with IAS 17, the RCI Banque group makes a customers. distinction between finance leases and operating leases. Impairment allowances for such risks that are recognized or reversed The main criterion that RCI Banque uses to classify leases as one or are combined under the heading “Cost of risk” in the consolidated the other is whether the risks and rewards of ownership are transferred income statement. to another party. Thus, leases under which the leased vehicle will be bought back by an RCI Banque group entity at the end of the lease Rules for writing off loans term are classified as operating leases, since most of the risks and rewards are not transferred to a party outside the group. The When a receivable has presented a demonstrable risk for a period of classification as operating leases of lease contracts that contain a buy- three years and there is no evidence suggesting that it will be back commitment from the RCI Banque group also takes into collected, the amount of the impairment allowance is reversed and account the estimated term of such leases. The lease term is far shorter the gross amount outstanding is transferred to receivables written than the economic life of the vehicle, which is estimated by the off. Renault Group at seven or eight years depending on the type of vehicle. Consequently, all leases with a buy-back clause are treated as Impairment of residual values operating leases. Operating leases are recognized on the balance sheet as non-current assets leased out and are carried at the gross value of The RCI Banque group periodically and systematically monitors the the assets leased out, less depreciation, plus lease payments receivable resale value of second-hand vehicles in order to optimize the pricing and staggered transaction costs yet to be taken to the income of its financing products. In most cases, the residual value of vehicles statement. Lease payments and depreciation are also recognized at the end of the contract term is determined by using tables of separately in the income statement. Transaction costs are taken to quoted prices that show typical residual values based on vehicle age income on a straight-line basis. Classification as an operating lease and mileage. does not change the assessments of counterparty risk and residual- value risk. However, for contracts under which the trade-in value of the vehicle at the end of the contract term is not guaranteed by a party external The accounting treatment of vehicle resale transactions at the end of to the RCI Banque group, an impairment allowance is booked if the operating lease contracts is identical to that described for finance estimated resale value is less than the original residual value. leases in part D above. 10 RCI BANQUE MANAGEMENT REPORT 2006

al statements

F) Transactions between the RCI Banque group and the Securities held to maturity Renault-Nissan Alliance These are securities that the enterprise intends to hold until maturity. RCI Banque helps to win customers and build loyalty to Renault- They are measured and carried at amortized cost. Barring exceptional Nissan Alliance brands by offering financing and providing services as circumstances, they may not be sold before maturity. an integral part of the Alliance’s sales strategy. Impairment allowances are booked only when there is a strong probability that the issuer will default. The main indicators and cash flows between RCI Banque and the Alliance in 2006 and 2005 were as follows: Securities held for trading purposes

Sales assistance These are securities to be sold in the very near future or held for the purpose of realizing capital gains. These securities are measured at fair In 2006 the RCI Banque provided ?9,873m in new financing value (including accrued interest), and changes in value are (including credit cards) compared with ?10,490m in 2005. recognized in the income statement.

Relations with the dealer network Securities available for sale

RCI Banque acts as financial partner to ensure and maintain the good By default, this category (“AFS securities”) includes all securities that are financial health of the Renault-Nissan distribution network. not intended to be held to maturity and are not held for trading purposes. At 31 December 2006, dealer financing net of impairment allowances These securities are measured at fair value (including accrued amounted to ?5,250m, compared with ?5,481m at 31 December interest), and changes in value (excluding accrued interest) are 2005. recognized directly in equity, under a revaluation reserve. Accrued Of the 2006 amount, ?623m was direct financing of affiliates or interest is recognized in the income statement. If the long-term value branches of Renault Group, compared with ?673m at 31 December of these securities is found to be impaired, such impairment would be 2005. In 2006 the dealer network received ?206m in payments for recorded directly in the income statement, not under equity. business referrals, compared with ?218m in 2005. Irreversible losses in the value of variable-income securities are also taken to the income statement, but cannot subsequently be reversed. Relations with the car makers H) Non-current assets (IAS 16, IAS 36) The RCI Banque group pays the car maker for vehicles delivered to dealers for which it provides financing. Conversely, the Non-current assets are carried and depreciated using the components Renault Group pays RCI Banque for vehicles taken back by approach. The components of an asset item, especially a complex dealers under financial guarantees made by the car maker. These asset, are treated as separate assets if their characteristics or useful lives transactions generate substantial cash flows between the two are different, or if they generate economic benefits at different rates. groups. For marketing reasons and as part of promotional Property, plant and equipment is measured at historical acquisition cost. campaigns, the car maker participates in reduced-rate financing Non-current assets other than land are generally depreciated on a packages offered to customers by RCI Banque. In 2006 Renault’s straight-line basis over the following estimated useful lives: participation amounted to ?229m, compared with ?205m in • Buildings: 15 to 40 years 2005. • Other tangible non-current assets: 4 to 8 years

G) Recognition and measurement of the securities portfolio I) Income taxes (IAS 12) (IAS 39) The restatements of the annual financial statements of companies RCI Banque’s portfolio of securities is classified according to the included in the scope of consolidation, made in order to conform to categories of financial assets specified in IAS 39. IAS for financial reporting purposes, as well as tax deferrals allowed in 11 Notes to the consolidated financial statements

the statutory statements filed for tax purposes, give rise to timing Valuation of liabilities for defined benefits differences in the recognition of income for tax and financial reporting purposes. A timing difference is also recognized when the For defined-benefit plans, costs of post-employment benefits are book value of an asset or liability differs from its value for tax estimated using the projected unit credit method. Under this purposes. The differences give rise to recognition of deferred taxes in method, benefit rights are allocated to periods of service according the consolidated financial statements. Deferred tax expense is to the vesting formula of the plan, taking into account a linearizing recognized by RCI Banque according to the liability method. It is effect when rights are not vested uniformly over subsequent periods calculated by applying the tax rate in effect at the closing date and of service. The amounts of future benefits payable to employees are applicable to the period in which the temporary differences will be measured on the basis of assumptions for salary increases, age of reversed. Within a given taxable entity (company, branch office or tax retirement and mortality and then discounted to present value at a consolidation group), deferred tax assets and liabilities are presented rate based on interest rates on long-term bonds of top-grade on a net basis whenever the entity is entitled to offset its tax issuers. receivables against its tax payables. Deferred tax assets are written When the assumptions of the calculation are revised, actuarial down whenever utilization is not probable. differences may arise, and a portion of the resulting differences may be spread over the expected average remaining period of service of For fully consolidated companies, a deferred tax liability is recognized plan participants. The portion that is spread is the amount more than for taxes payable on advance dividend distributions by the group. 10% in excess of either of the following values: • the present value at the closing date of the obligation for defined J) Pension and other post-employment benefits (IAS 19) benefits earned as of the closing date, or Overview of pension plans • the fair value of plan assets at the closing date. The net expense of the period, corresponding to the sum of the cost of services rendered, The RCI Banque group uses several different types of retirement and the excess of the cost of accretion over the expected return on plan post-employment benefit plans: assets, the amortization of actuarial differences and the spreading of past service costs, is recognized in full in personnel expenses. Defined-benefit plans Charges are booked to provisions for these plans to cover: K) Foreign currency translation (IAS 21) • indemnities payable upon retirement (France); • supplementary pensions: the main countries with this type of plan The financial statements of foreign companies are translated on the are the United Kingdom, the Netherlands, and Switzerland; following basis: • mandated savings plans: this type of plan is used in Italy. • Balance sheet items other than equity are translated at closing exchange rates. Defined-benefit plans are in some cases covered by funds. Such funds • Income statement items are translated at the average rate for the are subject to periodic valuation by independent actuaries. The value year. of fund assets, if any, is deducted from the corresponding liability. • Translation adjustments are included as a separate component of consolidated equity and do not affect income. The RCI Banque group affiliates that use external pension funds are Nissan Finance Ltd, Renault Financial Services BV and RCI Finance Cash balances in foreign currencies at year-end are translated at the SA. closing exchange rate. Gains or losses from foreign currency translation of such balances are recorded in the income statement. Defined-contribution plans In accordance with the laws and customary practices in each country, L) Financial liabilities (IAS 39) the group makes contributions based on salaries to national or private institutions responsible for pension plans and provident schemes. The The RCI Banque group recognizes financial liabilities consisting of bonds group has no liabilities in respect of such plans. and similar obligations, negotiable debt securities, securities issued as part 12 RCI BANQUE MANAGEMENT REPORT 2006

al statements

of securitization transactions and amounts owed to credit institutions. instruments depends on whether the transaction is eligible for hedge Any issuance costs and premiums on financial liabilities are amortized accounting. over the term of the issue according to the effective interest rate method. The derivatives used by RCI can be classified as fair value hedges or cash flow hedges. A fair value hedge protects against changes in the When first recognized, financial assets are measured at fair value net of fair value of the assets and liabilities hedged. A cash flow hedge transaction costs directly attributable to their issuance. At each closing, protects against changes in the value of cash flows associated with financial assets are measured at amortized cost according to the effective existing or future assets or liabilities. interest rate method, except when hedge accounting applies (part N below). The financial expenses so calculated include issuance costs and Measurement issue or redemption premiums. Financial liabilities covered by a fair value hedge are accounted for as Derivatives are measured at fair value when first recognized. described in part N. Subsequently, fair value is re-estimated at each closing date. • The fair value of forward currency agreements and currency swaps M) Structured products and embedded derivatives (IAS 39) is determined by discounting future cash flows at market interest rates and exchange rates at the closing date. The group engages in a small number of structured transactions. The • The fair value of interest-rate derivatives represents what the group issues are hedged by derivatives so as to neutralize the embedded would receive (or would pay) to unwind the contracts at the closing derivative and thereby obtain a synthetic adjustable-rate liability. date, taking into account unrealized gains or losses as determined by current interest rates at the closing date. The only embedded derivatives identified within the RCI Banque group correspond to indexing clauses contained in structured bond Fair value hedge issues. When embedded derivatives are not closely related to the host contract, they are measured and recognized separately at fair RCI Banque has elected to apply fair value hedge accounting in the value. Changes in fair value are then recognized in the income following cases: statement. The structured issue with the embedded derivative • hedging interest-rate risk on fixed-rate liabilities using a receive extracted, i.e. the host contract, is measured and recognized at fixed/pay variable swap, amortized cost. • hedging currency risk on foreign-currency liabilities using a cross currency swap. Structured issues are associated with swaps of assets with characteristics Fair value hedge accounting is applied on the basis of documentation identical to those of the embedded derivative, thereby providing an of the hedging relationship at the date of implementation of the tests effective economic hedge. However, because the use of one derivative of fair value hedge effectiveness, which are performed at each balance to hedge another derivative is prohibited by IAS 39, embedded sheet date. derivatives that are separated from the host contract and swaps associated with structured issues are accounted for as if held for trading Changes in the value of fair value hedging derivatives are recognized purposes. in the income statement.

N) Derivatives and hedge accounting (IAS 39) For financial liabilities covered by a fair value hedge, only the hedged component is measured and recognized at fair value, in accordance Risks with IAS 39. Changes in the value of the hedged component are recognized in the income statement. The unhedged component of RCI Banque’s management of financial risks (interest-rate risk, these financial liabilities is measured and recognized at amortized cost. currency risk, counterparty risk and liquidity risk) is described in the If the hedging relationship is terminated before the end of its term, risk management chapter of this document. The group enters into the hedging derivative is classified as an asset or liability held for contracts constituting financial derivatives as part of its policy of trading purposes, and the item hedged is recognized at amortized managing currency and interest-rate risk. The accounting for these cost in an amount equal to its last fair value measurement. 13 Notes to the consolidated financial statements

Cash flow hedge The credit equivalent is calculated using weighting coefficients by type of instrument (3% per year for transactions involving a single RCI Banque has elected to apply cash flow hedge accounting in the currency, 12% per year for transactions involving two currencies) and following cases: the term of the transaction. These coefficients are intentionally set • hedging interest-rate risk on variable-rate liabilities using a receive higher than those stipulated by the capital adequacy regulations, fixed/pay variable swap, making this a deliberately prudent and conservative approach under • hedging interest-rate risk associated with replacement of fixed-rate current market conditions. Risks on positions that are offset with the assets (macro hedge), same counterparty are not netted. • hedging probable or certain future cash flows in foreign currency. Cash flow hedge effectiveness tests are performed at each balance • Monitoring of risk on a given counterparty is based on the method sheet date to ensure that the relevant transactions are eligible for described above. Settlement risk is taken into account. The method hedge accounting. For the second type of hedging, the test relies on an internal rating system determined jointly with the performed entails ascertaining that interest-rate exposure on the Renault Group. The score is based on a number of weighted risk cash flows from reinvestment of non-derivative financial assets is factors: level of equity, solvency ratio, long-term and short-term indeed reduced by the cash flows from the derivatives used for ratings from rating agencies, and qualitative assessment of the hedging. counterparty.

Changes in the value of the effective part of cash flow hedging P) Segment information (IAS 14) derivatives are recognized in equity, in a special revaluation reserve account. RCI Banque provides segment information in two ways, by market and by geographic region. Trading transactions In accordance with the standard, segmentation by market has been adopted as the first level of disclosure: it corresponds to the way RCI This line item includes transactions not eligible for hedge accounting Banque has developed its strategy. The second level of disclosure is under IAS 39 and currency hedging transactions to which RCI geographic: it corresponds to the way RCI Banque analyzes its Banque has preferred not to apply hedge accounting. management performance

Changes in the value of derivatives held for trading purposes are Business activities are segmented by customer category: recognized in the income statement. • The Retail segment covers all financing and related services for consumers. These transactions involve primarily: • The Enterprise segment covers financing, fleet management and • foreign exchange transactions with an initial maturity of less than 1 other services for business customers. year, • The Dealer segment covers financing to the dealer networks for • identified embedded derivatives that are part of the group’s Renault-Nissan Alliance brands. structured issues and the associated swaps, • swaps contracted in connection with securitization transactions, Results are presented separately for each of these three market • receive variable/pay variable swaps in a given currency to hedge segments. Refinancing activities and activities of the holding company interest-rate risk on variable-rate issues. are grouped together under “Other activities. Renault, Nissan, Dacia and multi-brand sales financing activities have been combined. O) Information pertaining to counterparty risks on derivatives The earnings of each business segment are determined on the basis of internal analytical conventions for intercompany billing and valuation •Aggregate counterparty risk on all derivatives contracted by the of funds allocated. The equity allocated to each business segment is RCI Banque group is measured according to a standard internal the capital effectively made available to the affiliates and branches, method. divided among them according to internal analytical rules. 14 RCI BANQUE MANAGEMENT REPORT 2006

al statements

3. GROUP STRUCTURE In December 2006 the RCI Banque group established two branch offices: RCI Banque SA sucursal España in Spain and RCI Slovenia. Changes in the scope of consolidation in 2006 Additions to the scope of consolidation in 2005 The structure of the RCI Banque group was affected in 2006 by the following events: The following entities were brought with the scope of consolidation • RCI Leasing Romania SRL is now fully consolidated following the in 2005: buy-out by RCI Banque of all minority interests. Previously, this • the Hungarian affiliate, Renault Credit RT Hungary, fully entity was 50% owned and proportionately consolidated. consolidated as a wholly owned subsidiary, • RCI Korea has been fully consolidated since 1 January 2006. This • the two Czech sales financing affiliates, RCI Leasing CZ s.r.o., change generated a first-consolidation profit of ?2.7m as described proportionately consolidated at 50%, and RCI Finance Czechia, in Note 24. fully consolidated as a wholly owned subsidiary 100%, • RCI Finance SK, a branch of RCI Finance CZ s.r.o. in Slovakia, In October 2006, the Group exercised the option that it held to fully consolidated at 100%, purchase the entire interest in RFS Ltd. held by the partner, effective • RCI Bank Polska, fully consolidated at 100%, 1 July 2007. In view of the evenly split management structure in • Nissan Renault Finance Mexico. RCI Banque’s 15% interest is effect until 1 July 2007, and in accordance with accounting policies, accounted for under the equity method. the company is proportionately consolidated in the 2006 financial statements.

15 Notes to the consolidated financial statements

4. NOTES ON THE CONSOLIDATED STATEMENTS By geographic region

NOTE 1: Segment information Information on financial and commercial performance in the main geographic regions is presented in the “Group Operations” table By market appended to this document.

A breakdown by market is provided for the main income statement NOTE 2: Derivatives aggregates as well as for average performing loan outstandings in the corresponding periods. The markets and the accounting policies associated with them are defined in part P above. 12/2006 12/2005 (in millions of euros) ASSETS LIABILITIES ASSETS LIABILITIES Fair value of financial assets and Information on financial and commercial performance in the main liabilities recognized as derivatives geographic regions is presented in the “Group Operations” table held for trading purposes 86 55 93 68 appended to this document. Interest-rate derivatives 80 48 87 60 Currency derivatives 6 7 6 8

Fair value of financial assets (in millions of euros) Retail Enterprise Dealer and liabilities recognized Other TOTAL as derivatives used for hedging 100 62 84 111 12/2006 financing financing financing Average performing Interest-rate and currency derivatives: loan outstandings 12,566 5,158 5,412 - 23,136 Fair value hedges 31 7 62 2 Net banking income 606 246 125 42 1,019 Interest-rate derivatives: Gross operating income 381 145 90 12 628 Cash flow hedges 69 55 22 109 Operating income 298 110 67 12 487 Total 186 117 177 179 Pretax income 301 110 68 12 491

12/2005 Average performing These line items include primarily OTC derivatives contracted by the loan outstandings 12,573 5,004 5,310 - 22,887 Net banking income 599 228 129 46 1,002 RCI Banque group as part of its policy of hedging currency and Gross operating income 379 124 98 12 613 interest-rate risks. The transactions that give rise to entries under this Operating income 268 82 89 15 454 Pretax income 269 82 90 16 457 heading are described in chapter 2 in part M and O.

The rise in interest rates in 2006 led to an increase in the net market value of the portfolio of interest-rate derivatives assigned to hedging future cash flows. The majority of these derivatives are pay fixed/receive variable interest-rate swaps.

16 RCI BANQUE MANAGEMENT REPORT 2006

al statements

Nominal values of derivative instruments, by maturity and management intent

Total 0–1 year 1–5 years +5 years (in millions of euros) 12/2006 12/2005 12/2006 12/2005 12/2006 12/2005 12/2006 12/2005 Hedging of currency risk Currency swaps Loans 487 331 161 176 315 155 11 - Borrowings 493 326 168 177 314 149 11 - Forward forex contracts Purchases 900 757 900 757 - - - - Sales 905 752 905 752 - - - - Forex transactions Currency loaned, not yet delivered ------Currency borrowed, not yet received 51 51 - - - - Spot forex transactions Loans ------Borrowings ------Hedging of interest-rate risk Interest rate swaps Lender 15,981 20,615 5,479 6,737 10,272 11,648 230 2,230 Borrower 15,981 20,615 5,479 6,737 10,272 11,648 230 2,230

At 31 December 2006, the counterparty risk equivalent was NOTE 3: Financial assets available for sale and other ?1,693m, compared with ?2,081m at 31 December 2005. This financial assets amount applies only to credit institutions and was calculated without (in millions of euros) 12/2006 12/2005 taking netting agreements into account, in accordance with the Financial assets available for sale 9 9 methodology described in part O on accounting policies. Government debt securities and similar 5 7 Variable-income securities 4 2 Other financial assets 2 16 Investments in companies controlled but not consolidated 2 16 Total 11 25 of which: listed securities 4 1

Other financial assets consist essentially of equity securities of companies not yet consolidated for reason of insignificant operating activity at the closing date. These assets are carried at historical cost.

The decrease in Other financial assets is due to the full consolidation of RCI Korea effective 1 January 2006.

17 Notes to the consolidated financial statements

NOTE 4: Amounts receivable from credit institutiont Customer finance transactions

(in millions of euros) 12/2006 12/2005 (in millions of euros) 12/2006 12/2005 Credit balances in sight accounts at credit institutions (1) 546 1,031 Total loans and advances to customers, gross 18,019 18,171 Ordinary accounts in debit 496 980 Loans and advances to customers 17,957 18,117 Overnight loans 50 51 Factoring 396 327 Other commercial receivables 132 1 Term deposits at credit institutions 9 - Other customer credit 16,452 16,739 Participating loans - - Ordinary accounts in debit 163 207 Term loans 9 - Doubtful and compromised receivables 814 843 Total 555 1,031 Interest receivable on customer loans and advances 62 54 Factoring - 1 Other customer credit 41 31 (1) Credit balances in sight accounts are included in the line item Doubtful and compromised receivables 21 22 “Cash and cash equivalents” in the cash flow statement. Total of items included in amortized cost -Customer loans and advances (90) (72) The line item “Ordinary accounts in debit” includes, for 2006, Staggered handling charges and sundry expenses (68) (61) Staggered contributions to sales incentives by manufacturer ?319m of investments made by securitization funds (Alliance Auto or dealers (222) (209) Loans France, Alliance DFP France and Alliance Auto Loans Italy) Staggered fees paid for referral of business 200 198 with banks external to the group against ?753m of such investments Impairment on loans and advances to customers (587) (562) Impairment on delinquent or at-risk receivables (164) (141) for 2005. Impairment on doubtful and compromised receivables (414) (413) Impairment on residual value (9) (8) NOTE 5: Customer finance transactions and simila Total customer finance transactions, net 17,342 17,537 The securitization transactions that occurred at Diac, RNC S.p.A., Cogera and RCI Banque Niederlassung Deutschland were not (in millions of euros) 12/2006 12/2005 intended to result in derecognition of the receivables assigned by Loans and advances to customers 23,074 23,294 those companies. The assigned receivables as well as the accrued Customer finance transactions 17,342 17,537 Finance lease transactions 5,732 5,757 interest and impairment allowances on them continue to appear on Operating lease transactions 307 435 the asset side of the group’s balance sheet. Total 23,381 23,729 The factoring receivables result from the acquisition by the group of Renault’s commercial receivables from companies in Europe.

18 RCI BANQUE MANAGEMENT REPORT 2006

al statements

Finance lease transactions Operating lease transactions

(in millions of euros) 12/2006 12/2005 (in millions of euros) 12/2006 12/2005 Finance lease transactions 5,829 5,842 Operating lease transactions 332 466 Leasing and long-term rental 5,672 5,688 Non-current assets, net of security deposits 312 459 Doubtful and compromised receivables 137 140 Doubtful non-current assets, net of security deposits 1 2 Accrued interest 20 14 Doubtful and compromised receivables 19 5 Total of items included in amortized cost Impairment on operating leases (25) (31) – Finance leases 27 43 Impairment on delinquent lease contracts - (1) Staggered handling charges (6) - Impairment on doubtful and compromised lease contracts (4) (5) Staggered contributions to sales incentives Impairment on residual value (21) (25) by manufacturer or dealers (32) (29) Total operating lease transactions, net 307 435 Staggered fees paid for referral of business 65 72 Impairment on finance leases (124) (128) Impairment on delinquent or at-risk receivables (19) (27) The amount of minimum future payments receivable under simple Impairment on doubtful and compromised receivables (101) (99) non-cancellable lease contracts is analyzed as follows: Impairment on residual value (4) (2) Total finance lease transactions, net 5,732 5,757 1 year (in millions of euros) < 1 year > 5 years 12/2006 to 5 years Reconciliation between gross investment in finance lease contracts at Operating leases – gross investment 173 221 - 394 the closing date and present value of minimum payments receivable: Residual value not guaranteed 76 131 - 207

Minimum payments 1 year receivable under the lease 97 90 - 187 (in millions of euros) < 1 year > 5 years 12/2006 à 5 years Finance leases – net investment 2,476 3,373 6 5,855 Finance leases Residual values – future interest receivable 278 168 1 447 Finance leases – gross investment 2,754 3,541 7 6,302 Total risk on residual values carried by RCI Banque was ?424m in Amount of residual value guaranteed 2006, compared with ?635m in 2005. Impairment allowances on to RCI Banque group 994 1,524 3 2,521 residual value amounted to ?23m in 2006 and ?29m in 2005. (of which amount guaranteed by related parties) 471 529 2 1,002 Minimum payments receivable under the lease (excluding amounts 2,283 3,012 5 5,300 guaranteed by related parties, as required by IAS 17)

19 Notes to the consolidated financial statements

NOTE 6: Customer finance transactions by business segment

12/2006 12/2005 (in millions of euros) Retail Enterprise Dealer Other Total Retail Enterprise Dealer Other Total Gross value 12,938 5,325 5,454 399 24,116 13,658 4,803 5,666 323 24,450 Non-impaired receivables 12,466 5,192 5,077 395 23,130 13,196 4,685 5,264 314 23,459 Doubtful receivables 472 133 377 4 986 462 118 402 9 991 of which: compromised 282 86 25 1 393 280 76 21 6 383 Impairment allowance on individual basis (373) (139) (146) (3) (661) (383) (130) (134) (4) (651) Non-impaired receivables (41) (38) (61) - (140) (47) (47) (41) - (135) Doubtful receivables (332) (101) (85) (3) (521) (336) (83) (93) (4) (516) of which: compromised (215) (72) (16) (1) (304) (223) (59) (22) (2) (306) Impairment allowance on collective basis (11) (6) (57) - (74) (8) (7) (55) - (70) Country risk (8) (4) (5) - (17) (8) (1) (4) - (13) Net value 12,554 5,180 5,251 396 23,381 13,267 4,666 5,477 319 23,729 of which: related parties (excluding participation in incentives and fees paid for referral) - 24 623 129 776 673 89 762

Other than the Renault Group, there is no single counterparty to which the RCI Banque group has credit commitments representing more than 10% of its equity. The “Other” category includes refinancing and activities of the holding company. The impairment allowances for country risk concern Argentina, Brazil and Romania only. The business segment information is described in Note 1.

NOTE 7: Adjustment accounts – Assets and other assets

(in millions of euros) 12/2006 12/2005 Current tax assets 53 82 Deferred tax assets 64 56 Adjustment accounts and other assets 331 373 - tax receivables other than on current income tax 73 80 - Social Security and employee-related receivables 1 1 - other sundry debtors 141 131 - adjustment accounts – Assets 36 36 - other assets 56 - items received on collections 75 119

Total 448 51

Deferred tax assets are analyzed in Note 28.

20 RCI BANQUE MANAGEMENT REPORT 2006

al statements

NOTE 8: Interests in associates NOTE 10: Goodwill

(in millions of euros) 12/2006 12/2005 (in millions of euros) 12/2006 12/2005

Share Share Goodwill from acquisitions by country of Net of Net Germany 12 12 net Assets income net Assets income United Kingdom 11 11 Nissan Renault Finance Mexico Hungary 5 5 (customer financing) 13 5 10 2 Italy 99 Nissan Renault Wholesale Mexico (dealer financing) 2 - 3 - Total 37 37

Total – equity-accounted associates 15 5 13 2 ?32m of goodwill relates to the acquisition of Nissan sales financing affiliates in 1999.

A 15% interest in Nissan Renault Finance Mexico was acquired in 2005 to increase RCI Banque’s activities in Mexico. NOTE 11: Liabilities to credit institutions and customers and debt evidenced by certificates NOTE 9: Tangible and intangible non-current assets Total liabilities by method of measurement (in millions of euros) 12/2006 12/2005

Intangible assets, net 44(in millions of euros) 12/2006 12/2005 Gross value 37 36 Liabilities measured at amortized cost 20,129 21,650 Accumulated amortization and impairment (33) (32) Amounts payable to credit institutions 3,738 4,662 Property, plant and equipment, net 36 37 Amounts payable to customers 622 563 Gross value 109 110 Debt evidenced by certificates 15,769 16,425 Accumulated depreciation and impairment (73) (73) Hedged liabilities measured at fair value 1,036 1,111 Total 40 41 Amounts payable to credit institutions 219 21 Amounts payable to customers - - Debt evidenced by certificates 817 1,090 Total 21,165 22,761

21 Notes to the consolidated financial statements

Liabilities to credit institutions Debt evidenced by certificates

(in millions d’euros) 12/2006 12/2005 (in millions of euros) 12/2006 12/2005 Sight accounts payable to credit institutions (1) 166 194 Interbank market securities 324 162 Ordinary accounts 91 72 Other interbank securities 324 162 Other amounts owed 75 122 Negotiable debt securities 10,149 10,621 Term accounts payable to credit institutions 3,791 4,489 Certificates of deposit 3,243 2,662 Term borrowings 3,646 3,808 Commercial paper and similar 698 1,010 Securities covered by repurchase agreements or sold outright 109 650 EMTNs and similar 6,131 6,885 Accrued interest 36 31 Accrued interest 77 65 Total 3,957 4,683 Bonds 3,005 3,882 Fixed/variable/adjustable-rate borrowings 2,955 3,820 (1) Sight accounts are included in the line item “Cash and cash Accrued interest 50 62 equivalents” in the cash flow statement. Securities covered by Other debt evidenced by certificates 3,108 2,850 Other debt evidenced by certificates 3,100 2,839 repurchase agreements consist of discounted receivables and/or Accrued interest 8 11 securities assigned to the European Central Bank. Total 16,586 17,515

Customer finance transactions – Liabilities Interbank securities are issued by CFI Renault do Brasil.

(in millions of euros) 12/2006 12/2005 Certificates of deposit, commercial paper, EMTNs and similar notes Amounts payable to customers 611 552 are issued by RCI Banque and Diac. Ordinary accounts 159 100 Term accounts 452 452 Other amounts payable to customers 9 9 Other debt evidenced by securities consists primarily of the securities Accrued interest 2 2 issued by the vehicles created for the French (Diac and Cogera) and Total 622 563 Italian (RNC S.p.A.) securitizations. of which: related parties (1) 521 494

(1) Cogera, a subsidiary of the RCI Banque group, has obtained a limited-recourse loan from Renault s.a.s. in the amount of 4450m, secured by a pledge of amounts owed to Cogera by Renault s.a.s. This transaction was undertaken for the purposes of refinancing loans to Renault France Automobiles (RFA), the Renault Group’s sales subsidiary in France, and reducing Cogera’s commitments on the Renault Group. The loans to RFA remain on the asset side of the balance sheet under the original line item.

22 RCI BANQUE MANAGEMENT REPORT 2006

al statements

Breakdown of financial liabilities by currency, before derivatives

12/2006 12/2005 Other Other (in millions of euros) EUR UE* currencies TOTAL EUR UE* currencies TOTAL

Amounts payable to credit institutions 3,293 298 366 3,957 3,788 455 440 4,683 Amounts payable to customers 555 - 67 622 525 - 38 56 Interbank market securities -- - 324 324 -- - 162 162 Negotiable debt securities 9,594 261 294 10,149 9,969 295 357 10,621 Bonds 2,987 - 18 3,005 3,882 - - 3,882 Other debt evidenced by certificates 3,108 - - 3,108 2,839 - 11 2,850 TOTAL 19,537 559 1,069 21,165 21,003 750 1,008 22,761 *Other currencies of European Union countries

Financial liabilities by maturity

The breakdown of financial assets and liabilities by maturity is presented in Note 17.

Financial liabilities by nature and type, before derivatives

12/2006 12/2005 Weighted Weighted average average Variable Fixed Variable Fixed TOTAL effective TOTAL effective rate rate interest rate rate interest (in millions of euros) rate rate

Amounts payable to credit institutions 1,616 2,341 3,957 4.08% 2,378 2,305 4,683 2.97% Amounts payable to customers 510 112 622 3.37% 455 108 563 2.16% Interbank market securities - 324 324 N/A 162 - 162 N/A Negotiable debt securities 6,403 3,746 10,149 3.59% 7,939 2,682 10,621 2.58% Bonds 1,763 1,242 3,005 4.28% 2,316 1,566 3,882 3.79% Other debt evidenced by certificates 3,108 - 3,108 3.78% 2,839 11 2,850 2.22%

TOTAL 13,400 7,765 21,165 16,089 6,672 22,761

Most adjustable-rate liabilities are adjusted at intervals of three months or less.

23 Notes to the consolidated financial statements

1. APPROVAL OF FINANCIAL STATEMENTS – • Interpretation IFRIC 9, Reassessment of embedded derivatives, DISTRIBUTIONS which is applicable for financial years beginning on or after June 2006. The consolidated financial statements of the RCI Banque group for • Interpretation IFRIC 10, Interim financial reporting and the year 2006 were established by Board of Directors on 2 February impairment, which is applicable for financial years beginning on or 2007 and will be presented for shareholder approval at the general after 1 November 2006. meeting of 19 April 2007. An annual dividend of 250 euros per share, for a total distribution of ?250m, will also be proposed at that Application of these standards and interpretations in 2007 will have a meeting. For comparison, the general meeting of 30 May 2006 set negligible impact on the net income and equity of the group. the dividend for 2005 at 180 euros per share, for a total distribution of ?180m. The consolidated financial statements are expressed in The consolidated financial statements of RCI Banque are fully millions of euros, except where indicated otherwise. consolidated in those of the Renault Group.

2. ACCOUNTING METHODS A) Consolidation

As a subsidiary of a listed company, and in accordance with the option Scope and methods of consolidation allowed in France for groups publishing consolidated statements, RCI Banque has prepared its consolidated financial statements in In addition to RCI Banque and its foreign branches, the scope of accordance with International Financial Reporting Standards (IFRS), consolidation includes subsidiaries over which RCI Banque exercises beginning with the 2005 financial year. exclusive control, entities over which it exercises joint control (joint The following new standards, which came into force on 1 January ventures) and entities over which it exercises significant influence 2006 and had appeared in the Official Journal of the European Union (associates). Companies over which RCI Banque exercises exclusive by the closing date, have also been applied, but have no material effect control are fully consolidated. on the financial information presented: • The amendments to IAS 19 concerning actuarial gains and losses, The securitized assets of Diac, Cogera, and RNC S.p.A. as well as the group plans, and disclosures. RCI Banque has not elected to loans made to Renault France Automobile and refinanced by limited- recognize actuarial gains and losses in equity. recourse borrowing are fully consolidated inasmuch as a majority of • The amendments to IAS 39 concerning the fair value option and the risks and benefits thereof are retained by RCI Banque. hedging of cash flows on future intragroup transactions. • The amendment to IAS 21 concerning effects of currency exchange Entities over which RCI Banque exercises joint control are differences. proportionately consolidated. Companies over which RCI Banque exercises significant influence are accounted for under the equity method. Interpretation IFRIC 4, determining whether an arrangement contains a lease, has no effect of the financial statements at 31 Entities which, taken collectively, do not account for a significant December 2006. proportion of the consolidated accounts, are not included in the scope of consolidation. Securities of such entities are recorded under The group has not made early application of any standard or “Other financial assets.” The following criteria are used to determine interpretation already issued but not mandatory until after 31 the threshold for inclusion: December 2006, in particular any of the following: • the combined balance sheet total of the non-consolidated entities • IFRS 7, Financial instruments disclosures, which is applicable from amount to less than 1% of the RCI Banque group’s balance sheet 1 January 2007. total, i.e., ?251m at 31 December 2006; • The amendment to IAS 1 on capital disclosures, which is applicable • the combined net banking income of the non-consolidated entities from 1 January 2007. amounts to less than 1% of the RCI Banque group’s total net • Interpretation IFRIC 8, Scope of IFRS 2 on share-based payment, banking income, i.e., ?10m for the year ended 31 December 2006. which is applicable for financial years beginning on or after 1 May 2006. Inclusion of these entities in the scope of consolidation would have a 6 Notes to the consolidated financial statements

NOTE 12: Securitization

SECURITIZATION Country FRANCE ITALY Ceding entity DIAC SA COGERA SA RNC SPA Start date October 2006 January 2005 November 2003 Maximum term of fund October 2020 January 2012 November 2021 Issuance vehicle Car Alliance Auto Loans Alliance DFP France Alliance Auto Loans France France Italy SPV law 130 Initial purchase of receivables ?2,323m ?1,372m ?1,402m automobile independent automobile loans loan dealer loans Receivables purchased as of 31/12/2006 ?2,333m ?1,512m ?1,239m Credit enhancement 0.10% cash collateral 4.5% overcollateralized 2% overcollateralized (?2.3m) receivables receivables Hedging of interest-rate risk by swaps Yes (with guarantee) No Yes (mirror swaps) Issuance vehicle: Car Alliance Auto Loans Cars Alliance Funding PLC Cars Alliance Funding PLC – France FCC – Ireland – Ireland Issuance vehicle: Class A Series 2005-1 Class A Series 2003-1 Class A CARS by rating: AAA rating: AAA rating: AAA public issue ?1,705.7m ?814m ?570.1m Medium-term Class B Series 2005-1 Class B Series 2003-1 Class B Outstanding rating: A rating: A rating: A at 31/12/2006 ?94.3m ?36m ?45m Listed private placement Class R Series 2005-2 Class A Class A rating: AAA rating: AAA rating: AAA Short term ?364.3m ?200m ?633.8m Notes in issue at 31/12/2006 held at 31/12/2006 by RCI Banque, eliminated in the consolidated accounts

All of the securitized receivables, including accrued interest not yet due, remain on the asset side of the balance sheet. In accordance with the rules of consolidation, any residual units and short-term units held by RCI Banque have been eliminated from the consolidated financial statements.

To diversify its sources of funds and optimize its refinancing cost, in July 2006 RCI Banque launched a securitization by conduit of ?630m of receivables in Germany maturing in January 2013. Because this was a private issue, the terms and conditions of the issue are not disclosed in the table above.

NOTE 13: Adjustment accounts – Liabilities and other liabilities

(in millions of euros) 12/2006 12/2005 Current tax liabilities 48 85 Deferred tax liabilities 221 177 Adjustment accounts and other amounts payable 776 683 - taxes payables other than on current income tax 43 55 - social security and employee-related liabilities 37 13 - other sundry creditors 530 490 - adjustment accounts – Liabilities 166 124 Total 1,045 945

Deferred tax assets are analyzed in Note 28.

24 RCI BANQUE MANAGEMENT REPORT 2006

al statements

NOTE 14: Provisions

Reclass., Reversals currency 12/2005 Charges utilized unutilized translat. 12/2006 effects changes in scope of (in millions of euros) consolidation

Banking operations Provisions for signature commitments 4 1 - (1) 2 6 Provisions for litigation risks 9 - (2) - - 7 Other provisions 19 14 (2) (2) - 29

Total provisions on banking operations 32 15 (4) (3) 2 42

Non-banking operations Provisions for post-employment benefits and similar 27 2 (1) - 1 29 Provisions for restructuring 20 2 (5) (2) - 15 Provisions for tax and litigation risks 19 3 (2) (2) - 18 Other 6 4 (1) (3) (1) 5 Total provisions on non-banking operations 72 11 (9) (7) - 67

Total 104 26 (13) (10) 2 109

Each of the legal proceedings in which RCI Banque or its affiliates are involved was reviewed at the closing date. On the advice of legal counsel, provisions were established when deemed necessary to cover estimated risks.

Companies of the group are periodically subject to tax audits in the countries where they do business. Uncontested deficiency notices are booked by means of tax provisions. Contested deficiency notices are recognized case by case on the basis of estimates taking into account the merit of the claims against the company concerned and the risk that it will not prevail in its case.

At year-end 2006, the provisions for restructuring concerned primarily Germany, Spain, the Netherlands, and Portugal.

Provisions for post-employment benefits and similar

(in millions of euros) 12/2006 12/2005 France 18 17 Rest of world 11 10

Total 29 27

Principal actuarial assumptions

12/2006 12/2005 Retirement age 60 years 60 years Salary increases 3.30% 3.28% Financial discount rate 4.39% 4.07% Starting rate 4.99% 5.48%

25 Notes to the consolidated financial statements

Change in provisions during the year

Actuarial Value obligations Unrecognized Provision value of less value actuarial on of invested of invested gains/ balance (in millions of euros) obligations funds funds (losses) sheet Balance at 31 December 2004 33 (10) 23 (1) 22 Net charge for 2005 347 7 Benefits paid and contributions paid into pension fund (2) (1) (3) (3) Actuarial differences 101 1 Past service cost not recognized 00 Translation adjustment 00 Effect of restructurings 000 0 Projected return on assets 00 0 Balance at 31 December 2005 35 (7) 28 (1) 27 Net charge for 2006 444 Benefits paid and contributions paid into pension fund (1) (1) (2) (2) Actuarial differences (1) (1) (2) 2 0 Past service cost not recognized 0 0 Translation adjustment 0 0 Effect of restructurings and Other 8 (6) 2 (3) (1) Projected return on assets 11 1 Balance at 31 December 2006 45 (14) 31 (2) 29

The table below shows the amounts recognized in the income statement NOTE 15: Impairment allowances and provisions to cover for pension obligations counterparty risk

Reclass., effects of (in millions of euros) 12/2006 12/2005 12/2005 Charges Reversals changes in 12/2006 Cost of services rendered 3 3 scope of Cost of accretion 2 1 (en millions d’euros) consolidation Projected return on assets –1 Impairment of assets Other 4 Customer finance transactions 721 306 (296) 5 736 Securities transactions 9 1 (1) (7) 2 Net charges for the year 4 8 Total allowances for impairment of assets 730 307 (297) (2) 738

Total provisions recorded under liabilities Provisions for signature commitments 5 1 (1) 1 6 Other provisions to cover counterparty risk 11 2 (3) 1 11

Total provisions recorded under liabilities 16 3 (4) 2 17

Total 746 310 (301) - 755

A breakdown by segment of allowances for impairment of assets in connection with customer finance operations, together with the corresponding amounts receivable, is provided in Note 5.

En 2006, the decrease in the allowance for impairment on securities was essentially due to consolidation of the Korean subsidiary.

26 RCI BANQUE MANAGEMENT REPORT 2006

al statements

NOTE 16: Subordinated liabilities

(en millions d’euros) 12/2006 12/2005 Liabilities measured at amortized cost 252 252 Subordinated debt 250 250 Accrued interest 2 2 Hedged liabilities measured at fair value 19 15 Participating loan stock 19 15 Accrued interest - - Total 271 267

The subordinated debt securities issued to the public in 2005 have the following characteristics: • maturing in ten years (redeemable on 07/04/2015), • in euro, • at an interest rate of 3-month Euribor +0.4.

The participating loan stock was issued by Diac SA in 1985.

NOTE 17: Financial assets and liabilities by remaining term to maturity

General information

up to 3 months 1 year TOTAL up tp 3 months 1 year TOTAL (in millions of euros) > 5 years (in millions of euros) > 5 years 3 months to 1 year to 5 years 12/2006 3 months to 1 year to 5 years 12/2005 FINANCIAL ASSETS 6,817 6,680 10,534 102 24,133 FINANCIAL ASSETS 7,450 6,487 10,877 148 24,962 Derivatives 6 20 160 - 186 Derivatives 78 5 79 15 177 Financial assets available Financial assets available for sale and other for sale and financial assets 8 - 1 2 11 other financial assets 5 - 2 18 25 Amounts receivable Amounts receivable from credit institutions 548 4 3 - 555 from credit institutions 1,031 - - - 1,031 Loans and advances Loans and advances to customers 6,255 6,656 10,370 100 23,381 to customers 6,336 6,482 10,796 115 23,729

FINANCIAL LIABILITIES 6,384 4,474 10,370 325 21,553 FINANCIAL LIABILITIES 6,454 6,545 9,885 323 23,207 Derivatives 28 11 75 3 117 Derivatives 125 6 33 15 179 Amounts payable Amounts payable to credit institutions 1,438 882 1,627 10 3,957 to credit institutions 2,195 898 1,580 10 4,683 Amounts payable Amounts payable to customers 171 451 - - 622 to customers 112 450 1 - 563 Debt evidenced Debt evidenced by certificates 4,744 3,130 8,668 44 16,586 by certificates 4,022 5,189 8,271 33 17,515 Subordinated liabilities 3 - - 268 271 Subordinated liabilities - 2 - 265 267

27 Notes to the consolidated financial statements

NOTE 18: Fair value of financial assets and liabilities (under IAS 32)

12/2006 12/2005

Net Fair Unrealized Net Fair Unrealized book value gain book value gain (in millions of euros) value (loss) value (loss)

FINANCIAL ASSETS 24,133 24,099 (34) 24,975 25,101 126 Derivatives 186 186 - 177 177 - Financial assets available for sale and other financial assets 11 11 - 25 25 - Amounts receivable from credit institutions 555 555 - 1,031 1,031 - Loans and advances to customers 23,381 23,347 (34) 23,742 23,868 126 FINANCIAL LIABILITIES 21,553 21,647 (94) 23,207 23,293 (86) Derivatives 117 117 - 179 179 - Amounts payable to credit institutions 3,957 3,960 (3) 4,683 4,694 (11) Amounts payable to customers 622 622 - 563 563 - Debt evidenced by certificates 16,586 16,665 (79) 17,515 17,580 (65) Subordinated liabilities 271 283 (12) 267 277 (10)

Assumptions and methods • Financial assets Estimated fair values have been determined using available market Fixed-rate loans have been estimated by discounting future cash flows information and appropriate valuation methods for each type of at the interest rates offered to RCI Banque at 31 December 2006 and instrument. The methods and assumptions used are by nature at 31 December 2005 for loans with similar conditions and theoretical, and a substantial amount of judgment comes into play in maturities. interpreting market data. Using different assumptions and/or different valuation methods could have a significant effect on the • Loans and advances to customers estimated values. Sales financing receivables have been estimated by discounting future cash flows at the interest rate that would have applied to similar loans Fair values have been determined on the basis of information available (conditions, maturity, borrower quality) at 31 December 2006 and at at the closing date of each period and thus do not reflect later 31 December 2005. changes. Customer receivables with a term of less than one year are not discounted, as their fair value is not significantly different from net As a general rule, when a financial instrument is traded on an active, book value. liquid market, the latest quoted price is used to calculate market value. For instruments not traded on such a market, market value is • Financial liabilities determined by applying recognized valuation models that use Fair value of financial liabilities has been estimated by discounting observable market parameters. If RCI Banque does not have the future cash flows at the interest rates offered to RCI Banque at 31 necessary valuation tools, as for complex products, valuations are December 2006 and 31 December 2005 for borrowings with similar obtained from top-grade financial institutions. conditions and maturities. Projected cash flows are discounted according to the zero-coupon yield curve augmented by the spread The main assumptions and valuations methods used are the following. specific to RCI Banque.

28 RCI BANQUE MANAGEMENT REPORT 2006

al statements

NOTE 19: Own funds NOTE 20: Off-balance-sheet items

Consolidated own funds are determined in accordance with CRBF Regulation 90-02 and calculated as follows: (in millions of euros) 12/2006 12/2005 Commitments given 2,613 2,156 Financing commitments 2,478 2,103 Commitments to credit institutions - - (in millions of euros) 12/2006 12/2005 Commitments to customers 2,478 2,103

Total consolidated equity 2,414 2,062 Guarantee commitments 1 - Fair value and other regulatory adjustments of fair value (74) (14) Commitments to credit institutions - - Customer guarantees 1 - Planned dividend distribution (including to minority interests) (251) - Intangible non-current assets and goodwill (41) (41) Commitments on securities 115 - Other securities receivable 115 - Subordinated liabilities (excluding accrued interest) 268 265 Equity interest in credit institutions (11) (23) Other commitments given 19 53 Securities allocated to guarantees 1 22 Prudential capital (CRBF Regulation 90-02) 2,305 2,249 Reciprocal commitments 18 31 Commitments received 10,131 9,329 Financing commitments 5,624 5,679 Commitments from credit institutions 5,624 5,678 Commitments from customers - 1 Guarantee commitments 4,411 3,601 Guarantees received from credit institutions 94 91 Guarantees from customers 1,657 1,168 of which: Renault Group 689 472 Commitments to take back leased vehicles at the end of the contract 2,660 2,342 of which: Renault Group 1,011 636 Commitments on securities 55 - Other securities receivable 55 - Other commitments received 41 49 Other commitments received 23 18 Reciprocal commitments 18 31

29 Notes to the consolidated financial statements

Exposure to currency risk

2006 USD GBP JPY CHF CZK ARS BRR PLN HUF ROL KRW

BALANCE SHEET Long position 1,094 128 7 15 35 7 34 Short position –125 –22 –65 0 OFF BALANCE SHEET Long position 125 22 72 Short position –1,012 –125 –7 NET 0 82 0 3 7 7 15 28 7 0 34

2005 USD GBP JPY CHF CZK ARS BRR PLN HUF ROL KRW

BALANCE SHEET Long position 950 182 8 16 18 19 Short position –116 –241 –56 OFF BALANCE SHEET Long position 116 241 58 Short position –871 –179 –2 –11 NET 0 79 0 3 2 8 16 16 8 0 0

NOTE 21: Interest and similar income

Since the receivables in the Diac, Cogera, RNC S.p.A. and RCI (in millions of euros) 12/2006 12/2005 Banque Niederlassung Deutschland securitizations have not been Interest and similar income on: - transactions with credit institutions 4 35 derecognized, interest on those receivables continues to appear under - customer finance transactions 1,350 1,272 interest and similar income on transactions with customers. of which: related parties 242 208 - finance lease transactions 468 478 of which: related parties 24 26 - operating lease transactions 89 123 of which: related parties - 1 - accrued interest due and payable on hedging instruments 71 54 - accrued interest due and payable on financial assets available for sale 9 6 Staggered fees paid for referral of business: - customer loans (153) (143) - finance leases (59) (61) Total 1,779 1,765

30 RCI BANQUE MANAGEMENT REPORT 2006

al statements

NOTE 22: Interest and similar expenses NOTE 25: Net income / (expense) of other activities

(in millions of euros) 12/2006 12/2005 (in millions of euros) 12/2006 12/2005 Interest and similar expenses on: Other income from banking operations 512 486 - transactions with credit institutions (188) (191) Incidental income from finance contracts 268 258 - customer finance transactions (15) (15) Income from service activities 129 120 of which: related parties (15) (14) Income related to non-doubtful lease contracts 102 98 - Finance lease transactions (5) (4) of which: reversal of impairment on residual values 32 17 - operating lease transactions (59) (90) Other income from banking operations 13 9 - accrued interest due and payable on hedging instruments (76) (99) of which: reversal of charge to reserve for banking risks 35 - debt evidenced by securities (533) (457) Other expenses of banking operations (420) (422) - other interest and similar expense (2) - Costs of services related to finance contracts (194) (197) Total (878) (856) Costs of service activities (55) (55) Expenses related to non-doubtful lease contracts (114) (112) of which: allowance for impairment on residual values (27) (20) Distribution costs not treatable as interest expense (40) (46) NOTE 23: Net gains / (losses) on financial instruments at Other expenses of banking operations (17) (12) fair value through profit and loss of which: charge to reserve for banking risks (10) (7) Other income and expense of banking operations, net 92 64 (in millions of euros) 12/2006 12/2005 Other income from non-banking operations 16 14 Net gains / (losses) on derivatives classified Other expenses of non-banking operations (13) (12) as transactions in trading securities 24 Net income (expense) of other activities 95 66 Ineffective fair value hedges - - Change in value of hedging instruments (20) (22) Les prestations et les coûts des prestations accessoires aux contrats de Change in value of hedged items 20 22 financementIncidental income ainsi que and les expenses produits of et services les coûts related des activités to financing de services as well se Net gains / (losses) on forex transactions - 2 Net gains / (losses) on equity investments at fair value (3) - rapportentas income principalement and expenses à desof prestationsservice activities d’assurance concern et d’entretien. primarily Net gains / (losses) on financial instruments insurance and maintenance contracts. at fair value through profit and loss (1) 6

NOTE 24: Net gains (losses) on financial assets available for sale and other financial assets

(in millions of euros) 12/2006 12/2005 Other financial assets - (4) - dividends 1 1 - gains or losses on disposal - - - charges to (reversals of) impairment allowances (1) (5) Differences on first consolidation 3 5 Total 3 1

In 2006, the inclusion of RCI Broker de Asigurare Srl and RCI Korea within the scope of consolidation generated income of ?3m corresponding to differences on first consolidation. In 2005, the inclusion of the Hungarian and Czech affiliates and one Mexican affiliate within the scope of consolidation generated income of ?5m.

31 Notes to the consolidated financial statements

NOTE 26: General operating expenses NOTE 27: Cost of risk, by customer category

(in millions of euros) 12/2006 12/2005 This item includes the net increase / (decrease) in impairment Personnel costs (213) (225) allowances, losses on receivables written off, and amounts recovered Employee pay (144) (145) on receivables written off. Expenses of post-retirement benefits (13) (16) Other employee-related expenses (48) (50) Other personnel expenses (8) (14) (in millions of euros) 12/2006 12/2005 Other administrative expenses (167) (153) Retail financing (82) (110) of which: rental charges (16) (18) Impairment allowances (142) (99) Total (380) (378) Reversal of impairment 135 53 Losses on receivables written off (89) (82) Other personnel expenses include amounts charged to and reversed Amounts recovered on loans written off 14 18 from provisions for restructuring and for personnel-related risks. Enterprise financing (33) (42) Impairment allowances (43) (49) Reversal of impairment 49 40 Employees Losses on receivables written off (41) (33) Amounts recovered on loans written off 2 - Dealer financing (24) (9) (average number of employees) 12/2006 12/2005 Impairment allowances (76) (101) Sales financing operations and services in France 1,373 1,456 Reversal of impairment 65 95 Sales financing operations and services in other countries 1,638 1,706 Losses on receivables written off (13) (4) Amounts recovered on loans written off - 1 Total 3,011 3,162 Change in allowance for country risk (4) 4 Change in allowance for impairment of other receivables - (3) Cost of risk (143) (160) Other valuation adjustments 2 1 Total (141) (159)

In 2006, the overall cost of risk on Retail and Enterprise financing declined. The decreases came mainly in Italy, Germany, France, and Spain and were due to improvements in the amounts of delinquent and doubtful receivables and in improved recovery rate.

These improvements were offset in part by a rise in Dealer cost of risk, mainly in Germany, Spain and the United Kingdom, due primarily to deterioration in dealers’ financial condition and upward revision of the collective provisioning rate.

32 RCI BANQUE MANAGEMENT REPORT 2006

al statements

NOTE 28: Income tax Reconciliation of tax expense booked and theoretical tax charge

Current tax expense is equal to the amount of income tax due and (%) 12/2006 12/2005 payable to tax authorities for the year, under the rules and tax rates Statutory income tax rate – France 34,43 34,93 applicable in the various national jurisdictions. Differential in tax rates of French entities 1,89 1,22 Certain differences between companies’ income for tax purposes and Differential in tax rates of foreign entities 0,72 (1,99) their income for consolidated financial reporting purposes give rise to Change in impairment allowance on deferred tax assets recognition of deferred taxes. These differences result mainly from and losses on tax loss carryforwards (0,41) (1,58) Effect of differences on first consolidation (0,16) (0,32) rules for accounting for lease-purchase and long-term rental Effect of equity-accounted associates (0,33) (0,17) transactions and for recognizing impairment on doubtful receivables. Other impacts 0,51 (0,40) Effective tax rate 36,65 31,69 Breakdown between current tax expense and deferred taxes RCI Banque group’s effective tax rate was 36.65% in 2006, compared with 31.69% the year before. In 2005, the low effective tax rate was due largely to cancellation of the tax expense recognized in 2004 (in millions of euros) 12/2006 12/2005 relating to undercapitalization in Germany, following a change in Current tax expense (169) (128) legislation in that country. In 2006, the differential in tax rates of Deferred taxes (11) (17) foreign entities was due primarily to tax audits. Income / (expense) of deferred taxes, gross (13) (24) Change in allowance for impairment of deferred tax assets 2 7 Total income tax expense (180) (145) Current and deferred tax expense recognized as changes in equity

Breakdown of net deferred taxes by major category 2006 change 2005 change (in millions of euros) in equity in equity before before tax net tax net tax tax

(in millions of euros) 12/2006 12/2005 Cash flow 93 (33) 60 80 (28) 52 Impairment 52 104 hedges Provisions and other charges deductible when paid 34 28 Tax loss carryforwards 11 20 Other assets (82) 83 Lease transactions and non-current assets (165) (243) Other liabilities (6 (110)

Net deferred tax asset /(liability) (156) (118)

33 Notes to the consolidated financial statements

5. COMPANIES AND FOREIGN BRANCHES INCLUDED IN THE SCOPE OF CONSOLIDATION

direct % country interest of RCI indirect interest of RCI PARENT COMPAGNY: RCI Banque S.A. % held by 2006 2005

BRANCHES of RCI Banque Sales financing outside France RCI Banque SA Niederlassung Deutschland Germany RCI Banque Sucursal Argentina Argentina RCI Banque SA sucursal España* Spain RCI Banque Succursale Portugal Portugal RCI Slovenia* Slovenia Refinancing RCI Banque Succursale Italiana Italy

COMPANIES FULLY CONSOLIDATED:

Holding and refinancing companies RENAULT Acceptance Ltd United Kingdom 100 100 100 Sales financing in France Diac SA France 100 100 100 Cogera SA France - 94,81 Diac SA 94,81 94,81 Diac Location SA France - 100 Diac SA 100 100 Sogesma SARL France - 100 Diac SA 100 100 Service companies in France Reca SA France - 99,96 Diac SA 99,96 99,96 Sigma Services SA France - 100 Diac SA 100 100 Sales financing outside France RCI Finanzholding GmbH Germany 100 100 100 RCI Leasing GmbH Germany - 100 RCI Banque Niederlassung 100 100 Deutschland Rombo Compañía Financiera SA Argentina 60 60 60 RCI: Bank AG Austria 100 100 100 RCI Financial Services SA Belgium 100 100 100 Renault AutoFin SA Belgium 100 100 100 Administradora de Consorcio Renault do Brasil S/C Ltda. Brazil 99,92 - 99,92 99 Companhia de Arrendamento Mercantil Renault do Brasil Brazil 60 60 60 Companhia de Credito, Financiamento e Investimento Renault do Brasil Brazil 60 60 60 RCI Korea* Korea 100 100 Renault Financiaciones SA Spain 100 100 100 Overlease SA Spain - 100 Renault Financiaciones SA 100 100 Accordia España SA Spain - 100 Renault Financiaciones SA 100 100 Nissan Finance Ltd United Kingdom 100 100 100 Renault Credit RT Hungary** Hungary 100 100 100 RNC S.p.A. Italy 100 100 100 Refactor S.r.L. Italy - 100 RNC S.p.A. 100 100 RCI Financial Services BV Netherlands 100 100 100 Renault Crédit Polska Sp. zoo Poland 100 100 100 RCI Bank Polska** Poland 100 100 100 RCI GEST S.C.A. SA Portugal 100 100 100 RCI GEST S.G.P.S. SA Portugal - 100 RCI GEST S.C.A. SA 100 100 RCI GEST Leasing SA Portugal - 100 RCI GEST S.G.P.S. SA 100 100 RCI Broker de Asigurare Srl* Romania 100 RCI Finantare Romania 100 34 RCI BANQUE MANAGEMENT REPORT 2006

al statements

direct % country interest of RCI indirect interest of RCI

% held by 2006 2005 RCI Finantare SRL Romania Romania 100 100 100 RCI Leasing Romania S.R.L. Romania 100 100 50 RCI Finance SA Switzerland 100 100 100 Renault leasing CZ s.r.o.** Czech Republic 50 50 50 RCI Finance CZ s.r.o.** Czech Republic 100 100 100 RCI Finance Slovakia** Slovakia Branch of RCI Finance CZ s.r.o. Service companies outside France RCI Versicherungs Service GmbH Germany - 100 RCI Finanzholding GmbH 100 100 Renault Services SA Belgium - 99,95 0,05 RCI Financial Services SA 100 100 Renault AutoFin SA Corretora de Seguros Renault do Brasil SA Brazil 1 99 Consorcio Renault 100 100 do Brasil Ltda. Artida SA Spain - 100 Renault Financiaciones SA 100 100 RCI Gest Seguros Corretores LDA Portugal - 90 RCI GEST S.C.A. SA 100 100 Other SPV Alliance Auto Loans – Italy Italy (see Note 12) RNC S.p.A. FCC Rome Alliance Funding France (see Note 12) RNC S.p.A FCC Alliance Auto Loans – France France (see Note 12) Diac SA FCC Alliance DPF France France (see Note 12) Cogera SA COMPANIES PROPORTIONATELY CONSOLIDATED Sales financing in France Sygma Finance SNC France 50 50 50 Sales financing outside France Renault Credit Car Belgium 50,10 Renault AutoFin SA 50,10 50 Overlease S.r.L. Italy - 49 RNC S.p.A. 49 49 RFS Ltd. United Kingdom 50 Renault Acceptance Ltd. 50 50 COMPANIES ACCOUNTED FOR UNDER THE EQUITY METHOD Nissan Renault Finance Mexico S.A. de CV (SOFOL)** Mexico 15 15 15 Nissan Renault Wholesale Mexico S.A. de CV** Mexico 15 15 15

* Entity included in the scope of consolidation in 2006 ** Entity included in the scope of consolidation in 2005

The items appended to the Notes to the consolidated financial statements have been inserted in the following parts of the annual report: • The chapter “Managing aggregate interest-rate, currency, • The table “Group operations,” referred to in Note 1, appears on counterparty and liquidity risk,” referred to in part 2.4 of the pages 16 and 17 of the Annual Report. Notes, appears on pages 32 to 35 of business Report.

35 General information on RCI Banque

1 – GENERAL INFORMATION ON THE COMPANY or transformation of industrial, commercial, financial and service enterprises. A – General presentation • Conducting full or partial studies and engaging in consulting and negotiating activities in economic, financial, commercial and Name and registered office managerial areas. • Conducting research on designing and improving managerial, Registered name: RCI Banque. organizational and financial systems. At the extraordinary general meeting of 13 November 2001, the • Carrying out projects resulting from the aforementioned studies or name of the company was changed from Renault Credit International contributing to the execution thereof by any appropriate means, SA Banque to RCI Banque SA. including taking equity interests in existing or new entities. Nationality: French. • Financing business entities, in particular by acquiring holdings of Registered office: 14, avenue du Pavé-Neuf – 93168 Noisy-le-Grand their equity or debt securities, using the Company’s own funds or Cedex, Tel.: +33 1 49 32 80 00. borrowed funds. • Providing investment services within the meaning of the Financial Legal form Activities Modernization Act (96-597) of 2 July 1996. • Managing the portfolio of securities resulting from these activities, Société anonyme registered at the Paris commercial court on 4 June in particular by carrying out purchase, sale, exchange and transfer 1974, upon instrument notarized on 9 April 1974 subsequently transactions in securities of all kinds. approved at the ordinary general meeting of 28 May 1975. • Doing business as an insurance intermediary within the meaning of the French law of 15 December 2005 transposing the EC Directive Governing law of 9 December 2002, acting as agent, commissioner or broker. • More generally, carrying out any industrial, commercial, financial The Company is governed by the provisions of the French or property transactions directly or indirectly related to the Commercial Code. On 7 March 1991 RCI received approval from corporate purpose or to any similar or connected purposes useful the Banque de France to make the changes in its articles and by-laws to, or facilitating the realization and development of that purpose. necessary to become a bank. Since that date, RCI Banque has been subject to all the laws and regulations applicable to credit institutions, Registration and identification number in particular the provisions of Act 84-46 of 24 January 1984 incorporated into the Monetary and Financial Code. The Company is registered with the Bobigny Register of Companies under number 306 523 358 (APE code 651C); Siret: 306 523 358 Date created and term 00068.

The Company was created on 9 April 1974 and began operations on Access to legal documents 21 August 1974 for a term of 99 years, i.e., until August 2073. Legal documents pertaining to the issuer may be consulted at the Purpose Company’s registered office. Financial year The main purpose of RCI Banque is to engage in credit and banking The financial year begins on 1 January and ends on 31 December of operations of all kinds, in France and abroad, directly or indirectly, on each calendar year. its own behalf or on behalf of third parties, for the purposes of: • Financing acquisition of goods or services or for other purpose; in particular, long-term credit transactions as well as issuance or management of payment systems in connection with such transactions. • Conducting studies of all kinds relating to the formation, expansion 36 RCI BANQUE MANAGEMENT REPORT 2006

B – Special provisions of the by-laws Notices of meetings The Board of Directors calls the shareholders to general meetings by Statutory allocation of earnings means of a notice indicating the date, time and place of meeting. General meetings may also be convened by: Net income consists of net revenues for the year, less overhead costs 1. the Statutory Auditors; and other corporate expenses and after depreciation, amortization 2. a representative appointed by order of the presiding judge of the and impairment allowances. French commercial court ruling in summary proceedings at the At least five percent of net income less any prior-year losses is petition either of any interested party or of one or more appropriated to fund the legal reserve. Once the amount of the legal shareholders who own at least 5% of the share capital, reserve is equal to one-tenth of the share capital, this appropriation is 3. the receivers. no longer mandatory. It is resumed in the event that the legal reserve falls below one-tenth of the share capital for any reason. Quorum – Majority Distributable income consists of the current year’s income, less prior- Ordinary and extraordinary general meetings are subject to the year losses and amounts appropriated to the legal reserve in quorum and majority requirements prescribed by law and exercise the accordance with the foregoing paragraph and any other transfers powers ascribed to them by law. required by applicable law, plus unallocated retained earnings brought forward from previous years. From this income, the Ordinary General Composition of general meetings Meeting may decide to distribute a dividend. Any such dividend is to All shareholders, regardless of the number of shares they own, may be paid first out of the year’s distributable income. attend general meetings, participate in the proceedings and vote. From the available surplus, the Ordinary General Meeting may Owners of registered shares who have requested that such shares be appropriate any amounts it deems appropriate either to retained duly recorded at least five days before the date of the meeting are earnings to be carried over to the following year or to one or more admitted upon presentation of identification. Shareholders may be general or special reserve accounts, to be allocated or used as it sees represented by another shareholder or by their spouse. Proxies fit. prepared in accordance with law must be received at the registered office at least five days before the date of the meeting. All General Meetings (Articles 27 to 33 of the by-laws) shareholders, regardless of the number of shares they own, may attend extraordinary general meetings, participate in the proceedings Types of General Meetings and vote. The right to vote in ordinary general meetings belongs to Each year, the shareholders convene in an Annual General Meeting, the beneficial owner of the shares to which the right is attached; the which must be held within five months after the end of the financial right to vote in extraordinary general meetings belongs to the legal year. In addition, the shareholders may hold ordinary general owner. When a general meeting has been called, the Company shall, meetings that meet on an extraordinary basis, or extraordinary at its own expense, deliver or send a mail ballot and attachments general meetings when their purpose is to amend the by-laws, except thereto to any shareholder who so requests by registered mail, return as otherwise provided by law. The general meeting, duly constituted, receipt requested. The Company must honor any request received by represents all shareholders. Its deliberations, taken in accordance with the registered office not later than six days before the date of the law and the Company’s by-laws, are binding on all shareholders, even meeting. The mail ballot must contain certain information as those absent, incapable of attending or in disagreement. stipulated by Articles 131-2 et seq. of the Decree of 23 March 1967. Shares held in treasury by the Company are not counted in the It must clearly notify the shareholder that abstention from voting or calculation of the quorum. Two members of the works council failure to indicate voting instructions on any item shown on the form appointed by that council, one representing engineers and managerial will be treated as a vote against the proposed resolution. The form staff and the other representing support staff, may attend general may be included in the same document as the proxy form, if meetings. The Board of Directors may decide that shareholders will applicable. In this event, the applicable provisions are those of Article be able to participate and vote at general meetings by 131-4 of the aforesaid Decree. videoconferencing or any means of telecommunication that permits The documents stipulated by Article 131-2 of the aforesaid Decree them to be identified as required by law. must be attached to the mail ballot. A mail ballot sent to the 37 General information on RCI Banque

Company for a given meeting is also valid for any subsequent mail ballots. Proxies and mail ballots shall be submitted at the same meetings convened to address the same agenda. Mail ballots must be time and under the same conditions as the attendance sheet. received by the Company at least three days before the date of the The accuracy of the attendance sheet, duly initialed by the meeting. If a proxy is returned with a mail ballot, the proxy is taken shareholders in attendance and by shareholders’ representatives, is into consideration subject to the votes indicated in the mail ballot. certified by the officers of the meeting. The responsibilities of the meeting officers relate exclusively to the holding of the meeting and Meeting officers – Attendance sheet proper conduct thereof; their decisions are always provisional and The general meeting is chaired by the Chairman of the Board of remain subject to a vote by the meeting itself. Any interested party Directors or, in his absence, by the Vice-Chairman, if one has been may initiate such a vote. named, or by a director appointed by the Board. If the meeting has been convened by the Statutory Auditors, by a court-appointed Agenda representative or by the receivers, one of their number chairs the The agenda of the meeting is established by the Board of Directors or meeting. the person who convenes the general meeting. However, one or more The votes are counted by the two largest shareholders, either acting shareholders may, under the conditions prescribed by law, request on their own behalf or as representatives, or, if they decline, by the inclusion on the agenda of proposed resolutions that do not concern next largest shareholders, until this responsibility is accepted. These presentation of candidates for the Board of Directors. officers of the meeting appoint the secretary of the meeting, who need not be a member of the meeting. An attendance sheet Minutes of meetings containing all information required by law and regulation is drawn up The proceedings of general meetings are recorded in minutes that are at meetings of the shareholders. The officers of the meeting may entered in a special numbered and initialed register and signed by the attach to the attendance sheet the proxy or mail ballot showing the officers of the meeting. The minutes may be prepared on sequentially last name, usual first name and address of each shareholder numbered, initialed loose-leaf sheets. Copies or extracts of the represented or casting a mail ballot, the number of shares that he or minutes to be provided for legal or other purposes are duly certified she owns, and the number of votes attached to these shares. In this either by the Chairman of the Board of Directors or a director serving case, the officers of the meeting shall indicate the number of proxies as chief executive or by the secretary of the meeting. Such copies or and mail ballots attached to the attendance sheet, together with the extracts are valid with respect to third parties provided only that the number of shares and voting rights associated with such proxies and signatures thereon are valid.

38 RCI BANQUE MANAGEMENT REPORT 2006

2 – GENERAL INFORMATION ON THE SHARE Changes in share capital ownership over the past three years CAPITAL On 20 June 2003, the principal shareholder, Compagnie Financière A) General presentation Renault, was merged with and into Renault s.a.s.

Share capital Individuals or legal entities that exercise or may exercise control over RCI Banque The share capital, which was initially 2,000,000 French francs, was subsequently altered by capital increases and by conversion into euros. Renault s.a.s. owns 100% of RCI Banque. Following these changes, the share capital has stood at 100,000,000 euros since 22 November 2000. It is divided into 1,000,000 fully Issuer’s position within a group paid shares of 100 euros each. The Renault Group consists of two separate divisions: Authorizations to increase the share capital • the automobile division • the sales financing division constituted by the RCI Banque group. Not applicable. By virtue of its status as a bank, its independent access to financial markets and its integration into the car maker’s marketing, RCI Securities not evidencing ownership of equity Banque offers a competitive range of automobile financing products and related services to the distribution network for Not applicable. Renault Group brands worldwide and the Nissan brand in Europe. The organization of the RCI Banque group is described on the back Convertible bonds and other securities giving access to equity cover of this document

Not applicable. C) Markets for issuer’s securities

Five-year statement of changes in equity The Company’s shares are not listed on any stock exchange.

(in millions of euros) 2006 2005 2004 2003 2002 Securities listings Share capital 100 100 100 100 100 Publicly traded debt securities of the RCI Banque group are listed on • Increase in share capital to ?100,000,000: resolution adopted by the Luxembourg stock exchange. the Board of Directors on 22 November 2000. • Change of name to RCI Banque: resolution adopted by the General 3 – LEGAL RISKS Meeting of 13 November 2001. In the past twelve months, RCI Banque has not been the subject of B) Current ownership of share capital and voting rights any court proceeding or any proceeding of a governmental, judicial or arbitral nature. From the date that its audited financial statements Shareholders were published to the time of this writing, RCI Banque has not become aware of any risk, proposed court or arbitral proceeding that At 31 December 2006, Renault s.a.s. owned 100% of the Company’s could have or would have had a significant effect on its financial share capital. position or profitability.

39 General information

1 – BOARD OF DIRECTORS – EXECUTIVE BODIES

BOARD OF DIRECTORS, December 2006

Term Number % of share Name of director Position Term from expires of shares capital Philippe Gamba Chairman and Chief Executive Officer, RCI Banque group 30/05/2006 May 2012 1 Patrice Cabrier Executive Vice President, RCI Banque Europe 30/05/2006 May 2012 1 Jean-Pierre Framezelle Executive Vice President, Sales Operations, Diac group 28/05/2003 May 2009 1

Patrick Blain Senior Vice President, Sales Operations & Utility Vehicles Division 30/05/2006 May 2012 1 0.01%

Thierry Moulonguet Senior Vice President, Finance 30/05/2006 May 2012 1

Jean-Baptiste Duzan Vice President & Management Controller 30/05/2006 May 2012 1

Alain Dassas President of Renault F1 Team/RS 30/05/2006 May 2012 1

RENAULT s.a.s. (shareholder) 999,993 99.99%

The Board of Directors met three times in 2006. • There are no service contracts binding any member of the Board of Directors to RCI Banque or any of its affiliates and providing for At this time: rewards to be granted at the end of the contract; • there are no conflicts of interest between the duties of members of • independently of the regulated agreements, there are no the governing and executive bodies and their private interests with arrangements or agreements with principal shareholders, customers, regard to the RCI Banque group; suppliers or others under which any member of the Board of Directors has been selected.

2 – COMPENSATION PAID TO OFFICERS AND DIRECTORS

For 2006, the total of all compensation paid by RCI Banque to exercise within the controlling company, RCI Banque hereby states members of the governing and executive bodies was ?1,281,627, that no remuneration or perquisites of any kind (with the exception compared with ?1,463,353 in 2005. of a company vehicle for two of those officers) have been provided by The aggregate amount of compensation determined by the Company the Company or its affiliates to any of its officers and directors during and paid to the highest-paid individuals was ?1,985,429. As required the year ended, and that the remuneration and perquisites granted to by law, in particular Article L.225-102-1 of the Commercial Code those officers and directors by the controlling company are disclosed relating to disclosure of compensation of officers and directors, and by that company when they also serve as officers or directors of that taking into account the responsibilities that the officers and directors company.

40 RCI BANQUE MANAGEMENT REPORT 2006

3 – REGULATED AGREEMENTS • Master Definition Agreement. This agreements defines the set of terms used in all contracts relating to securitization of Cogera RCI Banque has entered into the following agreements with Cogera receivables and in the aforementioned Receivables Purchase SA. and Eurotitrisation: Agreement. • Receivables Purchase Agreement. The purpose of this agreement is • No consideration is associated with these agreements. Performance to specify the terms and conditions under which FCC Alliance DFP of the following agreement, approved during a previous financial France, represented by Eurotitrisation, a fund management year, continued during. RCI Banque has signed a tax consolidation company, purchases receivables from Cogera. agreement with Renault SA.

4 – EMPLOYEE PROFIT-SHARING PLAN

In accordance with Article L.442.11 of the Labor Code, RCI Banque Each beneficiary may choose to allocate this amount as follows: entered into a new profit-sharing agreement on 2 June 2003 in • to a current account in his or her name on the books of the application of Articles L.442-1 et seq. of that Code. Profit-sharing is Company, allocated to employees of the group in proportion to the gross salary received by each eligible participant during the relevant year, up to the ceilings set by law.

2006 2005 2004 2003 2002

Profit-sharing allocation ?6.1m ?6m ?5.6m ?5.2m ?2m Number of beneficiaries 1,518 1,661 1,657 1,893 2,014

RCI Banque group does not have a stock option plan for its employees, officers and directors.

41 5.1 – EXTERNAL AUDITORS

DELOITTE & ASSOCIÉS ERNST & YOUNG AUDIT 185, avenue Charles de Gaulle BP 136 Faubourg de l’Arche – 11, allée de l’Arche 92200 Neuilly-sur-Seine Cedex 92037 Paris-La Défense Cedex SA with share capital of ?1,723,040 S.A.S. with variable capital Statutory Auditor Statutory Auditor Member, Compagnie Régionale de Versailles Member, Compagnie Régionale de Versailles Term of office: 6 years Term of office: 6 years Term expires: 31 December 2007 Term expires: 31 December 2009 Represented on 31 December 2006 by Damien Leurent Represented on 31 December 2006 by Micha Missakian

5.2 – FEES PAID TO STATUTORY AUDITORS AND THEIR NETWORK

ERNST & YOUNG network DELOITTE TOUCHE TOHMATSU network OTHER networks 2006 2005 2006 2005 2006 2005 Amount Amount Amount Amount Amount Amount (in thousands of euros) ex VAT % ex VAT % ex VAT % ex VAT % ex VAT % ex VAT % 1- Audit fees 1.1 Statutory auditing, certifications, examination of the single-company and consolidated financial statements 890 98.32% 943 97.42% 1,147 99.25% 1,154 98.55% 61 74.78% 35 67.31% 1.2 Other audit and audit-related engagements 89 1.68% 25 2.58% 39 0.75% 17 1.45% 21 25.22% 17 32.69% Total audit fees 979 100% 968 100% 1,186 100% 1,171 100% 82 100% 52 100% 2- Other services 2.1 Legal, tax, and employment matters 11 18.97% 64 62.78% 44 51.16% 58 57.49% 0 -- 2.2 Information systems 0 - 1 0.80% 0 - 0 0.25% 0 2.3 Other (inventory verification, etc.) 6 100% 47 81.03% 37 36.42% 42 48.84% 83 42.26% 324 100%

Total fees for other services 6 100% 58 100% 101 100% 86 100% 142 100% 324 100% Grand total 985 1,026 1,287 1,257 224 376

42 RCI BANQUE MANAGEMENT REPORT 2006

Legal information

1 – PRESENTATION OF THE COMPANY RCI Banque is not dependent on any patents, licenses, industrial AND THE GROUP supply contracts, commercial or financial sourcing agreements or agreements regarding new manufacturing processes. A) Background D) Investment policy RCI Banque resulted from the merger on 1 January 1990 of: • Diac, created in 1924 to finance sales of Renault vehicles in France; Main investments and disposals over the past three years • Renault Crédit International, established in 1974 to finance sales of Renault vehicles in Europe. Disposals Under the terms of the agreement of 27 March 1999 between 2006: Disposal of CVT SA on 5 June. Renault and Nissan, the RCI Banque group acquired Nissan’s sales 2005: Dissolution of RCI Leasing Beteilgungs GmbH in July. financing subsidiaries in five European countries. Those subsidiaries 2004: Disposal of Diac’s equity interest in BC Auto Enchères SA on have been consolidated by RCI Banque since 1 July 1999. At 31 26 February. December 2002, all shares were held by Compagnie Financière Acquisitions Renault, which in turn was wholly owned by Renault SA. Compagnie 2006: Romania, RCI Leasing Romania IFN SA became a wholly Financière Renault served as the umbrella for the Renault Group’s owned financing subsidiary on 20 September. finance companies. As from 20 June 2003, owing to its merger into 2005: Mexico, acquisition of a 15% equity interest in NR Finance Renault s.a.s., Compagnie Financière Renault is no longer a director Mexico SA de C.V. Sofol (financing affiliate). or shareholder of RCI Banque, and 100% of the share capital is now Hungary, buy-out on 4 November of the 50% equity interest held by Renault s.a.s. held by Raiffeisen Lizing Rt. in the Hungarian affiliate, which then became a financing subsidiary. B) Description of principal activities 2004: Mexico, acquisition of a 15% equity interest in NR Wholesale Mexico (trading company). RCI Banque provides sales financing for Renault Group brands Formation of new entities worldwide and for Nissan brands primarily in Europe. RCI Banque 2006: RCI Servicios Colombia SA (financing affiliate) in Colombia in has operations in France, fifteen other countries in Europe, the March. Americas (Argentina, Brazil, Colombia, Mexico), in the Euromed RCI Services Algérie SARL (financing affiliate) in Algeria in zone(Romania, Russia, Morocco, Algeria) and in Asia (South Korea). September. As a captive finance company, the RCI Banque group offers a RCI Banque SA bancna podruznica Ljubjana (branch) in comprehensive range of financing and related services to three Slovenia in October. categories of customer: RN Finance RUS s.a.r.l. (financing affiliate) in Russia in • Retail and Enterprise customers. RCI Banque offers new-and used- October. car loans, rentals with options to buy, leases and long-term rentals: 2005: RCI USLUGE d.o.o. (financing affiliate) in Croatia on 20 It also provides services to motorists such as maintenance and December. extended warranties, insurance and roadside assistance, and fleet RDFM SARL (financing affiliate) in Morocco on 11 April. management; RCI Broker de Asigurare S.r.L. (service affiliate) in Romania • Renault and Nissan dealers. The RCI Banque group finances on 29 August. inventories of new and used vehicles and spare parts, as well as 2004: RCI Bank Polska in Poland on November 21 (chartered as a short-term cash requirements. bank). RCI Finance C.Z. S.r.o. in the Czech Republic on 2 August. C) Dependence Branch of RCI Finance C.Z. S.r.o. in Slovakia on 22 RCI Banque provides financing to Renault and Nissan dealers and November. customers.

43 I – STATEMENT OF PERSON RESPONSIBLE FOR REGISTRATION DOCUMENT

I hereby declare that, to the best of my knowledge, the information in this document is correct and that all reasonable measures have been taken to that end. There are no omissions likely to alter the scope of this information, which fairly reflects the business and results of the group and provides a description of the principal risks that the group may face.

I declare that the financial statements prepared in accordance with applicable accounting standards give a true and fair view of the group’s assets and liabilities, financial position, and profit or loss.

30 March 2007 Chairman of the Board of Directors Philippe Gamba

II – DOCUMENTS AVAILABLE TO THE PUBLIC

This document is available on the RCI Banque website, www.rcibanque.com.

Any person desiring additional information on the RCI Banque group may, with no obligation, request documents:

by mail: RCI Banque Finance, Banking and Communication Department API LPN 45 14, avenue du Pavé Neuf 93168 Noisy-le-Grand Cedex, FRANCE

by telephone: +33 (0)1 49 32 69 07/82 59

44 - y r a r b i L o t o h P n a s s i N / t l u a n e R : s t i d e r c o t o h P