Credit Agricole's traders trump retail weakness as bank reports mixed Q3
Net profit falls but beats analyst consensus
Investment banking unit posts record revenues, up 8.2%
Revenue misses forecasts after retail sales drop
Group on track to meet 2025 financial targets a year early
By Mathieu Rosemain
PARIS, Nov 6 (Reuters) -French bank Credit Agricole SA CAGR.PA reported a smaller-than-expected drop in third quarter net profit on Wednesday after a record three months for its investment bankers offset weakness at some of its retail businesses.
Net profit at France's second-largest listed lender by market value in the July to September period fell to 1.67 billion euros ($1.83 billion), down 4.7% from a year earlier after a provisioning boost in 2023 linked to French savings accounts disappeared.
The smaller profit was still better than the 1.58 billion-euro analyst consensus compiled by the company.
The strong showing at Credit Agricole's corporate and investment bank (CIB), where sales rose a forecast-beating 8.2% to 1.53 billon euros, compares with a 4.9% rise at rival Societe Generale and 9% at BNP Paribas. Overall, those banks had very different quarters, with SocGen shares surging after it beat forecasts while BNP's stock slid.
Buoyant markets have encouraged investors to trade, companies to borrow and boosted capital markets activity globally in recent months, helping investment banks across Wall Street and Europe.
Credit Agricole's revenue from trading in fixed income, currencies and commodities (FICC) rose by 6.2%, below BNP's 12% growth but close to Societe Generale's 6.1%.
"Foreign exchange and linear activities are suffering a little, but we have very good momentum in other sectors, particularly with regards to securitisation... bond issues," Xavier Musca, head of Credit Agricole's CIB, said on a media call.
The lender's overall drop in earnings relates to the bank previously putting money aside to protect against higher interest rates for French savings accounts that customers use to buy a house.
Credit Agricole had benefited from more than 200 million euros of net profit released from those provisions last year, inflating 2023's third-quarter numbers.
Bank-wide revenue this year came in 2.3% higher at 6.49 billion euros, below the 6.56 billion-euro average analyst estimate after revenues at its French and Italian retail banks contracted.
Credit Agricole said its cost of risk - money set aside for bad loans - was 433 million euros, against the 792 million euros expected by analysts.
The listed entity of Credit Agricole Group said it was on track to meet its 2025 financial targets a year early including annual underlying net income of more than 6 billion euros.
A planned joint venture with payments company Worldline WLN.PA, CAWL, will be operational by end-March 2025 and has not been delayedby the sudden departure of Worldline's long-time CEO in September after it issued another profit warning, deputy CEO Olivier Gavalda said.
($1 = 0.9145 euros)
Reporting by Mathieu Rosemain;
Additional reporting by Bertrand de Meyer;
Editing by Tommy Reggiori Wilkes
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
