Credit Agricole quarterly profits slashed
Thursday 15 May 2008
French bank Credit Agricole said its first-quarter profit had slumped to 892 million euros, down by two thirds compared to the previous year. Having postponed takeover plans, the bank said it was looking into possible asset sales.
Thursday 15 May 2008
By AFPFrench bank Credit Agricole reported on Thursday that first-quarter net profit had fallen by two thirds to 892 million euros (1.32 billion dollars) on further writedowns.
It said it was freezing takeovers it had announced in March, signalling that it was putting on hold the takeover of Spanish bank Bankinter and Italian bank Banca Delle Marche.
The group would also analyse the possible sale of assets and could raise a potential total of 5.0 billion euros in the next 18 months.
Credit Agricole, which had announced on Tuesday it would seek 5.9 billion euros in fresh capital from shareholders, said it was replacing the finance director of its investment banking arm Calyon, Marc Litzler, by Patrick Valroff who heads its special financial services business.
The size of the share issue has puzzled analysts. The bank explained that losses at Calyon of 795 million euros deprived it of resources to carry through planned takeovers.
But the bank said that in the quarter it had also made a capital gain of 882 million euros from the sale of its shares in utilties group Suez and another gain of 420 million euros from the creation of a brokerage called Newedge.
Net banking income, a measures of profit on lending, in the first quarter fell by 18 percent to 4.11 billion euros.
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