BLBG:Credit Agricole Posts 2.85 Billion-Euro Loss on Greek Sale
Credit Agricole SA, France’s third- largest bank, posted a third-quarter loss that exceeded analysts’ estimates on costs tied to the sale of its Greek unit.
The net loss was 2.85 billion euros ($3.63 billion), the bank, based outside Paris, said in an e-mailed statement today. The loss was wider than the 1.88 billion-euro average estimate of seven analysts surveyed by Bloomberg.
Credit Agricole, led by Chief Executive Officer Jean-Paul Chifflet, agreed last month to sell its Emporiki Bank unit to Greece’s Alpha Bank under terms cutting the French bank’s net income by 1.96 billion euros. Credit Agricole is ending a six- year investment in Europe’s most indebted country as concerns linger Greece might exit the euro area.
“This reflects the past and especially their troubles in Greece,” Romain Burnand, who helps manage 900 million euros at Moneta Asset Management in Paris, said before the earnings release. “Now you need to look at their retail bank’s capacity to resist a more difficult economic situation in France.”
Leaving aside the costs related to the Emporiki sale and additional non-recurring charges, Credit Agricole had a profit of 716 million euros in the quarter, the company said. Profit from the French regional banks fell 3.5 percent while earnings at the LCL branch network declined 11 percent.
The bank also booked an accounting charge of 647 million euros tied to the theoretical cost of buying back its own debt as market prices fluctuate. Credit Agricole recorded a 572 million-euro writedown on its consumer-credit business, a 181 million euro loss linked to its sale of CA Cheuvreux, and a 193 million-euro accounting charge on its stake in Spain’s Bankinter SA.
Credit Agricole is selling Athens-based Emporiki for a token price of 1 euro, it said Oct. 17. The French bank will inject more funds into Emporiki, bringing the total capital boost since July to 2.85 billion euros, and buy 150 million euros of convertible bonds issued by Alpha Bank. Credit Agricole and Athens-based Alpha aim to complete the transaction by year’s end.
To contact the reporter on this story: Fabio Benedetti-Valentini in Paris at fabiobv@bloomberg.net
To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net;
