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May 7, 18:32 Source: APK-Inform Views: 83

Crédit Agricole profit nearly doubles

PARIS--French bank Crédit Agricole SA said Wednesday that first-quarter net profit was nearly doubled by tighter costs and lower provisions against bad loans as Europe's economy slowly recovers.

The Paris-based lender, France's second-largest listed bank by assets, said net profit jumped to EUR868 million ($1.21 billion) in the three months to the end of March, from EUR469 million a year earlier.

Provisions against bad loans stood at EUR590 million, down from EUR739 million in the same quarter last year.

Revenue also rose 9.7% to EUR4.01 billion, compared with EUR3.66 billion a year ago, lifted mainly by its retail banking business.

After two years of restructuring, the French bank, which was badly bruised by Europe'sdebt crisis, is slowly getting back on its feet, as it refocuses on its core businesses--retail banking, asset management and insurance--and slashes costs.

Crédit Agricole has struggled with ill-fated acquisitions over the past few years. In 2006, with France's banking market saturated and the economies of countries such as Greece soaring, Crédit Agricole embarked on an international expansion plan. In particular, it focused on southern Europe.

Breakneck expansion left the bank vulnerable when a financial crisis turned into a global recession. The French bank sunk billions of euros into extricating itself from Greece. Early last year, the French bank sold Emporiki to rival Greek lender Alpha Bank AE for a symbolic EUR1.

After retreating from about half of the countries where it had a presence, slashing over 2,000 jobs globally and restructuring its business, the bank is now seeking to close a prolonged period of restructuring in the aftermath of Europe's sovereign debt crisis.

Last month, the bank said it expected to achieve annual net profit upwards of EUR4 billion in 2016 compared with EUR2.51 billion in 2013.

Even as it revives growth, the bank also pledged to increase its core tier one ratio, a key measure of a bank's financial health, to above 10.5% by the end of 2016.

Crédit Agricole's core tier one ratio, which compares top quality capital such as equity and retained earnings with risk-weighted assets, stood at 9% at the end of March, up from 8.5% in January.

 

Source: marketwatch.com

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