FRENCH giant Credit Agricole surprised analysts by posting a second quarter profit yesterday, despite the flat French economy and tough Eurozone conditions.
But the bank is still taking major steps to shore up its position and reduce exposure to the troubled periphery nations. It hopes to finalise the sale of much of its Greek arm Emporiki in the next few weeks, and chief executive Jean-Paul Chifflet said he “remains open” to reducing the stake in Spanish Bankinter.
Its Italian unit Cariparma is also being cut down after it posted a €271m (£215.3m) loss, with 400 jobs set to be lost by the end of 2014 through a voluntary redundancy plan.
Profits slumped to €111m in the second quarter, a 67.3 per cent fall on the same period of 2011.
However, the bank did perform steadily in the domestic retail and savings space, despite the lack of economic growth in France.
Outstanding loans in the country rose 2.4 per cent on the year, while on-balance sheet deposits were up 7.7 per cent. Overall, Credit Agricole’s loan-to-deposit ratio fell from 128.8 per cent a year ago to 123.7 per cent in June 2012.
Meanwhile the bank slashed its short-term debt from €185bn to €127bn and raised its liquidity reserves to €151bn, equivalent to 137 per cent of its net short-term debt.
Similarly Credit Agricole reduced risk-weighted assets by €48bn, which the bank says leaves it on target for a Basel III core tier one capital ratio of 10 per cent by the end of 2013.