Credit Agricole posts record loss
French bank Credit Agricole reported a record quarterly net loss of 3.07bn euros (£2.58bn), performing worse than expected as it was hit by the cost of shrinking its balance sheet and the Greek debt crisis.
The semi-cooperative bank, which is under new management and trying to return to its low-risk retail lending roots, was hit by more than 2 billion euros in quarterly one-off charges that it had already disclosed in December.
Unprecedented cheap funding by the European Central Bank and a debt deal on Greece have calmed financial markets but the outlook is still uncertain, Credit Agricole’s chief said.
“We think 2012 is going to still be a tense period,” Jean-Paul Chifflet told journalists on a conference call. “We’re hoping that our results will be largely better than in 2011…the months of January and February, in everything that is (capital) markets, have been good.”
Europe’s sovereign debt crisis and volatile markets have taken a big bite out of European banks’ profits, particularly in bond trading. Deutsche Bank and Credit Suisse ended 2011 with quarterly losses, while Britain’s Barclays posted its worst quarter for three years.
Chifflet said the bank would cut trader bonuses by 20 per cent. Though larger rivals BNP Paribas and Societe Generale have pledged cuts of 50 per cent, Credit Agricole says it pays its traders less already.
Meanwhile smaller domestic rival Natixis reported a milder-than-forecast 32 per cent decline in quarterly profits as it became the latest lender to grapple with weak markets and the euro zone crisis.
Credit Agricole does not foresee a Greek exit from the euro zone, Chifflet said, though he added the bank was looking to cut its funding exposure to Emporiki by a variety of means including access to central-bank funding.
Credit Agricole’s record 3.1 billion-euro net loss was worse than 2.75bn euro average estimate in a Reuters poll of 11 analysts. Credit Agricole’s revenue fell four per cent to 4.66bn, higher than the poll average of 4.54bn.