FRENCH bank Credit Agricole reported record losses yesterday after a hefty tax bill on the disposal of its Greek arm sent costs soaring.
The bank lost €3.98bn (£3.47bn) in the fourth quarter of 2012 and €6.47bn in the year as a whole, its worst performance since going public 11 years ago. But shares rose as investors welcomed the bank’s plan to cut costs over the next three years.
Revenue fell 15.8 per cent on the year to €16.315bn, far more rapidly than operating expenses which only dipped 2.9 per cent to €12.037bn.
The bank was further hit by an unexpectedly large €838m tax bill on the sale of Greek unit Emporiki, as well as a €541m charge from a revaluation of its own debt and a €267m impairment recorded on its 20 per cent stake in Portuguese bank BES.
Tougher prudential requirements added charges of €832m to the corporate and investment banking arm, €923m to consumer finance operations and €921m to international retail banking.
But underlying performance was solid with normalised profits of €3bn in retail banking and a contribution of €3.538bn from its regional banks.
The bank vowed to turnaround its performance in 2013, arguing that it has now put its Greek losses behind it and is pushing through a programme of €650m in cost reductions across IT, procurement and real estate.
“2012 was a year of transformation and refocusing. We are turning a page and will develop a new medium-term plan this year,” promised chief Jean-Paul Chifflet.
The bank’s shares ended the day 3.89 per cent higher.