Credit Agricole plunges after €2.5bn write-down

CREDIT Agricole yesterday wrote off more than €2.5bn (£2.1bn) of assets and said it is cutting 2,350 jobs globally as it warned it would sink to a loss.

France’s third-largest listed bank also said it would close its equity derivatives and commodities businesses and leave 21 of the 55 nations in which it operates to focus on its core areas.

The loss of 1,750 jobs at the corporate and investment bank and in the region of 600 at its factoring and consumer finance arms is part of the back-to-basics approach devised by new chief executive Jean-Paul Chifflet. Most of the job cuts will take place outside France but last night the bank said it was too early to provide details of the locations.

The writedown includes €1.3bn to reflect the cuts to its investment banking division and €1.234bn as writedowns of minority stakes such as those in other banks Bankinter and BES.

Credit Agricole, which was downgraded by one notch to A+ by Fitch last night after Moody’s cut its rating last week, has also shelved its 2014 financial goals and ditched its dividend for this year to preserve capital.

Under the bank’s complex structure the listed company will fall to a loss while the group will record a profit. Its shares slid 6.7 per cent to €4.23.