Greek unit takes toll on Crédit Agricole

Credt Agricole chief executive Jean-Paul Chifflet said a deal could be reached "in a matter of weeks" on the sale of Emporiki.

Story highlights

  • Crédit Agricole said it aimed to complete the sale of its Greek subsidiary within weeks.
  • Crédit Agricole bought Emporiki for €2.2bn in 2006 but has made heavy losses.
  • The bank was also hit by a €427m loss from its stake in the Italian bank Intesa Sanpaolo.
Crédit Agricole, the French bank heavily exposed to the eurozone crisis, said it aimed to complete the sale of its Greek subsidiary within weeks as it reported a hefty slide in quarterly net profits driven in large part by losses in both Greece and Italy.
Jean-Paul Chifflet, chief executive, said a deal could be reached "in a matter of weeks" on the sale of Emporiki, although the bank said no decision had been made on entering advanced talks with any of the three local bidders, National Bank of Greece, Alpha Bank and Eurobank.
Crédit Agricole said it was in discussions with the Bank of Greece, the Greek financial stability fund and the European Commission on terms for the disposal of Emporiki, which the French lender bought for €2.2bn in 2006 but which has been heavily lossmaking since and has cost it €6bn in writedowns.
Net profits at France's third-largest bank by market value tumbled 67 per cent in the second quarter compared with the same period a year ago to €111m. The decline included €370m in losses at Emporiki, to which Crédit Agricole said its net funding remained stable at €4.6bn.
The bank was also hit by a €427m loss from its stake in the Italian bank Intesa Sanpaolo, in which it has now reduced its holding to less than 2 per cent.
Italy is Crédit Agricole's second-largest market after France and it also has stakes in banks in Spain and Portugal. It said net losses in its international retail operations were reduced to €271m in the period from €695m a year ago.
Retail subsidiary Cariparma, the French lender's main arm in Italy, was showing "good resilience", posting 9 per cent revenue growth in the second quarter.
Overall revenues at Crédit Agricole, a co-operative bank majority owned by its mutual shareholders, were down 14 per cent at €4.7bn in the second quarter, with operating expenses pegged back by 1.8 per cent to €3.3bn.
Like its bigger French peers BNP Paribas and Société Générale, Crédit Agricole is retrenching, including downsizing its corporate and investment banking operations.
Net profits in corporate and investment banking were down 58 per cent in the quarter to €295m, on revenues down 20 per cent at €1.35bn.
Crédit Agricole shares were flat in morning trading at €4.28, against a French market that was down slightly.