Credit Agricole Beats Earnings Forecasts — Update

By Elena Vardon

Credit Agricole reported a better than-expected drop in its profit for the second quarter on strong activity across all of its business lines and confirmed its outlook for the year.

The French lender's net profit for the three months ended June 30 fell to 1.83 billion euros ($1.98 billion) from EUR2.04 billion a year earlier, dragged by a number of one-off items including costs related to the reorganization of its mobility unit, it said Thursday. The result still topped a EUR1.61 billion consensus estimate taken from a Visible Alpha poll.

The bank's revenue for the period grew 1.8% on year to EUR6.80 billion, beating the EUR6.49 billion estimate penciled in by consensus. Gross operating income came in at EUR3.175 billion, ahead of views of a EUR2.97 billion result.

"It's a good set of numbers for the most part and French net interest income managed to defy ongoing industry weakness," Keefe, Bruyette & Woods analysts wrote in a note to clients, also pointing to a particularly impressive performance in the company's insurance and investment banking lines.

Chair Dominique Lefebvre said the results prove the capacity of its universal banking model to deliver a solid and regular performance.

Its common Tier 1 equity ratio--a measure of balance-sheet strength--stood at 11.6% compared with expectations of 11.8%. "Capital going backwards is an obvious blemish," KBW analysts noted.

The group confirmed its target to generate more than EUR6 billion in net income in 2024, which was brought forward from 2025 earlier this year. Consensus estimates a EUR6.4 billion figure for the year.

Shares in Paris traded flat at around EUR14 in midday exchanges while the banking subsector of the STOXX Europe 600 index shed around 2.4%.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

August 01, 2024 08:53 ET (12:53 GMT)

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