Domestic banking aids Credit Agricole to swing to a profit

CREDIT Agricole, France’s third-largest banking group, said yesterday that growth in its domestic retail business and a strong investment banking performance more than offset further losses in its Greek unit.

Second-quarter net profit surged 89 per cent to €379m (£310.4m), as net banking income grew 20 per cent to a record high of €5.47bn.

The group said its corporate and investment banking division swung to a profit of €330m in the second quarter from a loss of €87m a year earlier after it booked fewer losses on collateralised debt obligations, asset-backed securities and other risky holdings.

Excluding the impact of those risky assets, profit from ongoing operations in the division fell 23 per cent to €401m as strong growth in financing activities helped partially offset the sharp drop in trading revenues that were reported across the industry in the second quarter.

Shares of Credit Agricole closed up 2.7 per cent on Euronext’s Paris market, having initially surged as much as six per cent. The stock is still down 18 per cent since the start of the year.

The investment banking performance helped offset a €643m loss in the group’s international retail banking arm, which was driven by losses in its Emporiki Bank business in Greece.

Credit Agricole took a €418m goodwill impairment charge on the business after Emporiki set out its restructuring plans in late June.