Credit Agricole SA (EPA:ACA), one of the largest banks in France, reported that its profits for the first half of the current fiscal year rose by 44% to €2.41 billion after exiting its business in Greece. Its second quarter profit was €1.38 billion, up by 39% from its profit in the same period a year ago based on the bank’s financial statement.
Credit Agricole SA (EPA:ACA) said its retail banking operations were solid and able to support the needs of its individual and corporate clients. The bank reported that its new lending boosted its outstanding total loans from its branch networks in France by 0.4% year-over-year while GDP declined by 0.2% over the period.
According to Credit Agricole SA (EPA:ACA) the residential mortgages of its regional banks increased by 1.7% year-over-year, life insurance fund under management climbed by 3.5% and its on-balance sheet deposits in existing accounts surged by 2.1%, which improved its loan-to-deposit ratio. The bank reported that its regional banks contributed 100% to its group net income of €941 million during the second quarter, and €1.84 billion in the first half.
Credit Agricole quickly adapting to new context and regulations
Jean-Marie Sander, chairperson of Credit Agricole SA (EPA:ACA), said the group is the leading lender in France with more €484 billion worth of loans originated by its regional banks and LCL. Sander emphasized that the group played a significant role in restoring the economy of the country.
On the other hand, Credit Agricole’s CEO, Jean-Paul Chifflet said, “Our second quarter results confirm the trends we saw during the first three months of the year. The Group has changed its profile and is adapting to the prevailing context and the new regulations. We are pursuing the path we announced, building on our core strengths and financial soundness whilst continuing our cost-cutting efforts.”
During the previous year results, Credit Agricole SA (EPA:ACA) recorded €370 million losses from its Emporiki Bank business in Greece. The French bank also incurred €427 million losses from its stake in Intesa Sanpaolo in Italy.
Credit Agricole praised by Nomura for improved risk profile
Credit Agricole SA (EPA:ACA)’s balance sheet was €1.045 billion as of June 30, 2013. The bank said it has a long-term funding surplus of €51 billion by the end of the second quarter, and its total liquidity reserves were €233 billion. The bank said it has Core Tier 1 ratio of 11.3%, up by 30 basis points and its Basel 3 Common Equity Tier 1 ratio was 10%. Its leverage ratio was 3.5%.
Nomura analyst Jon Peace commented that Credit Agricole SA (EPA:ACA)’s results could lead to a positive modest reappraisal among investors. He also commended the bank’s “much improved risk profile.”