PARIS—French bank Cré dit Agricole SA on Tuesday posted a sharp
jump in second-quarter net profit, recovering from massive losses
it made in Portugal last year, and said it was nearing an agreement
with U.S. authorities to settle allegations of sanctions
breaches.
The Paris-based lender, France's second-largest listed bank by
assets, said net profit rose to €920 million ($1.01 billion) in the
three months to the end of June, from €77 million a year
earlier.
Revenue was up 18% at €4.63 billion, lifted by its asset
management, insurance and corporate and investment banking
businesses.
In the same quarter last year, the crisis facing Portuguese
lender Banco Espí rito Santo SA, in which Cré dit Agricole held a
14.6% stake, nearly wiped out the French bank's profit.
Chief executive Philippe Brassac said that talks with U.S.
authorities had "progressed quickly" during the quarter and that he
expected the bank to reach a settlement in the next few months.
"We now have a better estimate of what the total fine might be,"
said Mr. Brassac, without disclosing further details.
The bank booked a new provision of €350 million, raising its
total provisions to cover all potential litigation costs to about
€1.6 billion.
Cré dit Agricole's core tier-one ratio, which compares
top-quality capital such as equity and retained earnings with
risk-weighted assets, was stable at 10.2% from March.
The bank's leverage ratio, which measures capital held by the
bank against its total assets, stood at 4.3% compared with 4.4% at
the end of March.
In recent years, U.S. authorities have aggressively pursued and
fined European banks active in countries subject to U.S. sanctions.
Cré dit Agricole said in 2010 in regulatory filings that it was
under U.S. investigation for alleged sanction breaches.
Last year, French rival lender BNP Paribas SA paid a $8.97
billion fine, the largest ever paid by a bank in a sanctions case,
to settle allegations that it violated sanctions against Sudan,
Iran and Cuba.
BNP Paribas on Friday reported a second-quarter net profit of
€2.56 billion, compared with a €4.22 billion loss a year ago. Socié
té Gé né rale SA reports earnings on Aug. 5.
Write to Noemie Bisserbe at noemie.bisserbe@wsj.com
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