Breaking News
FONT-SIZE Plus   Neg
Share SHARE

Credit Agricole, Dexia Report Losses On Greece Exposure - Update

Credit Agricole, Dexia Report Losses On Greece Exposure - Update
RELATED NEWS
Trade ACA now with 

French lender Credit Agricole SA (ACA: Quote, CDA.L, CRARF.PK) and Franco-Belgian bank Dexia (DEX.L, DXBGF.PK) on Thursday reported losses for the fourth quarter and full-year 2011, respectively, marred by exposure to debt-ridden Greece. Dexia's results also included losses related to the restructuring of the bank, which culminates in nationalization of the Belgium unit.

Credit Agricole reported net loss group share of 3.07 billion euros for the fourth quarter, compared to a loss of 328 million euros last year. Revenues slipped 4 percent to 4.66 billion.

These results were in line with that of the company's larger peer BNP Paribas (BNP.L, BNPQY.PK), which last month reported a 51 percent drop in profit after making hefty provisions for Greek sovereign debt impairment. As for another rival Societe Generale SA (SCGLY.PK,SCGLF.PK), profit plunged 89 percent in the quarter, weighed down by losses from the investment banking business.

In December, Credit Agricole had said in an adjustment plan that it plans to scale back activity in the corporate and investment banking unit, which will include exiting from 21 of the 53 countries where the services are offered. Credit Agricole also said it would cut 2,350 jobs.

The company took 482 million euros hit in provisions mostly for staff-related costs for this plan. Impact of European support plan to Greece was 220 million euros in terms of cost of risk. This included 34 million euros related to the Emporiki unit.

Corporate and investment banking division reported a huge loss owing to 1.43 billion euros impact of costs related to the adjustment plan.

In the International Retail Banking division, net loss widened sharply with Emporiki's results in Greece further impacted by additional impairment on the sovereign debt and by severe deterioration in the economic situation.

Cost of risk increased 29.2 percent in the year, reflecting mainly the impairment of an average 74 percent on Greek government bonds. The Board of Directors reaffirmed that it would not propose a dividend for 2011.

Dexia also had a similar story to tell, weighed down by the sovereign debt crisis in Europe. The bank, which is going through a break-up, reported 2011 net loss group share of 11.64 billion euros or 5.97 euros per share compared to profit of 723 million euros or 0.37 euros per share last year. The prior-year figures were restated to consider the issuance of new ordinary shares.

The latest results included several one-off items, including a 4 billion euros loss related to the disposal of Dexia Bank Belgium and another 984 million euros loss stemming from the disposal of DexiaMunicipal Agency. A 75 percent discount on Greek sovereign bonds and assimilated exposure of 3.4 billion euros also added to the loss.

The company recorded negative income of 4.38 billion euros, compared to income of 1.56 billion euros last year, and said it will not pay a dividend for the year.

Credit Agricole shares are trading lower by 2.05 percent in Paris at 4.91 euros. Dexia shares are down 2.28 percent in Brussels at 0.30 euros.

Register
To receive FREE breaking news email alerts for Credit Agricole SA and others in your portfolio

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
Less than a month after resigning from Congress, former House Majority Leader Eric Cantor, R-Virg., has made the move from Washington to Wall Street by joining boutique investment bank Moelis & Co. A statement from Moelis said Cantor will serve as Vice Chairman and Managing Director and also be elected to the company's Board of Directors. Stocks continue to show a lack of direction in mid-day trading on Tuesday following the long, holiday weekend. Even with the lackluster performance, the markets are largely holding on to the bulk of their recent gains. After reporting an unexpected drop in U.S. construction spending in the previous month, the Commerce Department released a report on Tuesday showing that construction spending rebounded by more than expected in the month of July.
comments powered by Disqus
FREE Newsletters, Analysis & Alerts

 

Stay informed with our FREE daily Newsletters and real-time breaking News Alerts. Sign up to receive the latest information on business news, health, technology, biotech, market analysis, currency trading and more.