Credit Agricole exceeded market forecasts on Wednesday, despite a 491 million euro ($519 million) writedown causing a sharp fall in the French bank's fourth quarter profit. Shares in Credit Agricole, which said the writedown on the value of its French retail banking business was due to low interest rates, rose 3.3 percent in early trading as fourth quarter net income of 291 million euros beat estimates.
The bank is the latest in France to report falling retail banking revenues, as lenders grapple with mortgage loan renegotiations and declining fee income. Analysts had estimated Credit Agricole's net income of 254 million euros in a Reuters poll, and while the result beat their forecasts, it was down from 882 million euros a year ago.
Chief Executive Philippe Brassac said the LCL retail bank faced the same problems as others. "There is nothing specific to LCL when compared to retail (banking) in France," Brassac told journalists. Efforts to maintain and develop Credit Agricole's customer base in a highly competitive environment would pay off in coming quarters, especially given the very slow but gradual rise in interest rates, Brassac added.
LCL's underlying revenue fell 1.1 percent over the fourth quarter, performing slightly better than its peers, while cost cuts helped drive net income up 35 percent to 160 million euros. But for 2016 as a whole, LCL's revenue fell 14 percent, while French retail revenue was down 3 percent at BNP Paribas and 3.5 percent lower at Societe Generale.
Credit Agricole Group, the parent of the listed entity, said that as part of Amundi's rights issue to finance the Pioneer purchase, it was cutting its holding to 70 from 75.7 percent. Overall, group revenues rose 7 percent to 4.58 billion euros, above the poll average of 4.36 billion.
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