Credit Agricole 1Q Profit Fell as Provisions Soared
May 06 2020 - 01:35AM
Dow Jones News
By Pietro Lombardi
Credit Agricole SA's profit fell in the first quarter as the
bank set aside more provisions to cover potential loan losses, a
step taken by many large banks in Europe and the U.S.
France's second-largest listed bank by assets posted a 16% drop
in quarterly net profit to 638 million euros ($693.3 million), it
said Wednesday.
Revenue grew 7.1% to EUR5.20 billion.
Analysts had expected a net profit of EUR479 million on revenue
of EUR4.97 billion, according to a consensus forecast provided by
FactSet.
The bank set aside EUR621 million to cover potential soured
loans, up from EUR225 million a year earlier.
Credit Agricole's core Tier 1 ratio, a key measure of capital
strength, was 11.4% at the end of March, from 12.1% in December.
While the cancellation of the dividend for last year boosted the
bank's capital position, capital in the quarter was hit by the
partial unwinding of the Switch guarantee mechanism, under which
Credit Agricole transfers part of the regulatory requirements
related to its insurance operations to the regional banks of the
group, paying in return a fixed fee.
"Our results are good, and allowed us, this quarter, to absorb a
multiplication of cost of risk by three," Chief Executive Philippe
Brassac said.
"We are solid, we are prudent in our assumptions, and we are
very committed vis-a-vis the economy to successfully deliver with
success a scenario that we believe to be quite manageable."
Write to Pietro Lombardi at pietro.lombardi@dowjones.com
(END) Dow Jones Newswires
May 06, 2020 01:20 ET (05:20 GMT)
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