For the analysis of a two-dimensional nuclear system consisting of a number of homogeneous regions (termed cells), first the cell matrices which depend solely on the material composition and geometrical dimension of the cell (hence on the cell type) are constructed using a boundary element formulation based on the multigroup boundary integral equation. For a particular nuclear system, the cell matrices are utilized in the assembly of the global system matrix in block-banded form using the newly introduced concept of virtual side. For criticality calculations, the classical fission source iteration is employed and linear system solutions are by the block Gaussian-elimination algorithm. The numerical applications show the validity of the proposed formulation both through comparison with analytical solutions and assessment of benchmark problem results against alternative methods. (C) 2001 Elsevier Science Ltd. All rights reserved.