French lender Crédit Agricole SA (CRARF.PK) Tuesday reported a sharp increase in second-quarter profit, as most of the growth came from elimination of operating losses for Greece. The firm noted that its cost-cutting programmes have produced tangible results, with savings of 146 million euros in the quarter.
The parent company Crédit Agricole S.A.'s net income Group share for the quarter was 696 million euros or about $922.95 million, significantly up from 56 million euros in the previous year.
The company attributed the improved results to resilient business in a difficult climate, cost-cutting efforts and a controlled cost of risk. The year-ago results were hurt by operating losses of the Greek retail-banking unit. The second quarter of 2012 had recorded 427 million euros of impairment of Intesa Sanpaolo shares, and 370 million euros of costs on Greece.
The company said it has restated its prior-year results.
Crédit Agricole Group's net income Group share climbed 71.5 percent to 1.39 billion euros from 808 million euros in the previous year. Excluding own debt revaluation, DVA and loan hedges, net income Group share totaled 1.36 billion euros in the recent quarter, while it was 974 million euros in the year-ago quarter.
Net loss from discontinued activities was marginal 4 million euros, while the firm posted a loss of 404 million euros in the second quarter of 2012, which included operating results of Emporiki, CLSA and CA Cheuvreux.
Crédit Agricole SA's operating income for the recent quarter grew 23.9 percent to 806 million euros.
Meanwhile, revenues declined 0.9 percent to 4.39 billion euros. Revenues of the business lines improved 0.6 from the preceding year. Crédit Agricole Group's revenues improved 1.1 percent year-over-year to 8.17 billion euros. Operating income was 2.21 billion euros, up 9.2 percent from a year earlier.
Crédit Agricole SA's operating expenses declined 2.9 percent from a year earlier and totaled 2.9 billion euros, reflecting implementation of the company's cost-cutting programmes.
As at June 30, 2013, the Core Tier 1 ratio was 8.6 percent, compared with 8.5 percent at March 31, 2013, an improvement of 10 basis points.
Last week, French lender Societe Generale SA (SCGLY.PK,SCGLF.PK) reported a significant increase in profit for the second quarter, on strong growth at its Corporate and Investment Banking division. Meanwhile, BNP Paribas (BNPQY.PK,BNP.L) posted a 4.7 percent decline in second-quarter profit amid a lackluster environment in Europe, as well as higher provision for loan losses.
In Paris, Crédit Agricole shares are currently trading at 8.04 euros, up 0.20 euros or 2.50 percent, on a volume of 10.52 million shares.
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