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Credit Agricole Profit Plunges On Greek Woes

Credit Agricole Profit Plunges On Greek Woes
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5/11/2012 2:45 AM ET

French lender Credit Agricole SA (ACA: Quote, CDA.L, CRARF.PK) on Friday said its profit for the first quarter plunged about 75 percent, weighed down by losses related to Greece.

Net income group share plummeted to 252 million euros ($326 million) from 1 billion euros last year. The results included 224 million euros in charges related to the adjustment plan being implemented. They also included 466 million euros associated with the successful buyback transaction of hybrid securities and realized losses on the disposal of securities, especially concerning Intesa.

The total cost for Greece was 940 million euros. This included 373 million euros in the realization and extension of the PSI and 567 million euros for the Emporiki unit. Cost of risk in the quarter more than doubled to 1.77 billion euros, owing to the cost for Greece.

Excluding one-time items, net income Group share plunged 16.9 percent to 950 million euros.

The lender's peer BNP Paribas (BNP.L, BNPQY.PK) last week reported a 9.6 percent increase in first-quarter profit, benefited by a capital gain related to the sale of its stake in Klépierre SA. Adjusted earnings plunged from last year, hurt by own debt revaluation charges and Corporate and investment banking woes.

Credit Agricole's revenues grew 2.3 percent to 5.43 billion euros. Turnover included an 864 million euros gain on the hybrid securities buyback, which was partially offset by a loss of 394 million euros on the investment banking portfolio disposals under the adjustment plan and realized losses on stake disposals of 93 million euros.

Corporate and investment banking division's net income group share improved around 2 percent to 398 million euros, excluding the adjustment plan impacts, but increased significantly from the prior quarter's 77 million euros.

The business benefited from a strong recovery in capital market activities and from a substantial fall in the cost of risk in financing activities. Fixed income results were up sharply from last year owing to an excellent performance in bond activities, as primary issues rebounded in a more favorable debt market than at the end of 2011.

In the International Retail Banking division, revenues slid 3.4 percent and net loss Group share was 846 million euros, compared to a loss of 59 million euros last year. In Greece, Emporiki's results were once again hurt by the PSI and the worsening business environment.

The Core Tier 1 ratio improved 80 basis points sequentially to 9.4 percent, due primarily to the significant decline in risk-weighted assets.

For the Credit Agricole Group, net income group share declined to 804 million euros from last year's 1.53 billion euros. Revenues grew to 9.09 billion euros from 8.98 billion euros a year earlier.

The stock closed in Paris on Thursday up 4.54 percent at 3.50 euros on 21.96 million shares.

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by RTT Staff Writer

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