Credit Agricole targets €7bn profit by 2014

City A.M. Reporter
French bank Credit Agricole plans to boost net profit to 6-7 billion euros by 2014, with revenue of over 25bn euros, as it focuses on organic growth and low-risk domestic retail.

France's third-biggest listed bank will also reach a Tier 1 ratio of over 8.75 per cent without a capital increase under tougher incoming Basel III rules, the group said in a statement.

New chief executive Jean-Paul Chifflet will present his new strategy to investors later today (Thursday) as his management team attempts to stem losses at its international retail division and its investment bank.

"Our plan has been built without resorting to external growth, but with a focus on organic growth," Chifflet was quoted as saying in Les Echos' Thursday edition.

Credit Agricole, which in 2010 reported net profit of 1.26 billion euros after a hefty write-down on its stake in Italy's Intesa Sanpaolo (ISP.MI), is eyeing a return to its local roots after the financial crisis cut short an overambitious push in investment banking and international retail.

Retail net profit will grow to more than 3bn euros in 2014, from around 700 million in 2010, driven by a return to profit for international operations and domestic growth at the 39 regional lenders that control Credit Agricole.

Return on equity will in 2014 be between 10 and 12 per cent, Credit Agricole said, also helped by fresh cost-cutting at its corporate and investment bank. The group did not release an ROE figure for 2010 but it is seen as less profitable than bigger rivals BNP Paribas and Societe Generale