CREDIT Agricole, France’s second-biggest listed bank, blew past quarterly earnings forecasts on Wednesday (Feb 5) with a 27 per cent jump in profit, driven by insurance and asset management even as gains in its investment banking business lagged rivals.
The lender is the latest to benefit from soaring demand from clients wanting to trade in global markets, particularly in the final three months of 2024, with rival BNP Paribas beating expectations on Tuesday.
Credit Agricole said net income for the three months ending in December rose 27 per cent from a year earlier to 1.7 billion euros (S$2.4 billion), beating the 1.3 billion-euro analyst average estimate it had compiled.
Revenue came in at 7.1 billion euros, up 17 per cent, also above an average forecast of 6.5 billion euros.
The strong fourth quarter enabled Credit Agricole to report record full-year sales and net income, the latter totalling more than 7.1 billion euros.
The group’s asset management arm, Amundi, Europe’s largest fund manager, saw sales grow by 14.5 per cent year on year.
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Credit Agricole’s investment banking unit saw sales increase 7.7 per cent to a record 1.57 billion euros, a smaller rise than elsewhere.
Sales from trading in fixed income, currencies and commodities, while rising 17 per cent, underperformed BNP and below the average 26 per cent year-on-year increase recorded by Wall Street firms, according to Jefferies.
The listed entity of the larger Credit Agricole Group, composed of 39 regional banks, said its insurance business saw sales surge by 37 per cent, notably thanks to growth in assets under management.
The lender said it would propose a dividend of 1.10 euro per share, up 5 per cent from a year earlier.
Bumper profits have left European banks flush with cash and encouraged some CEOs to bid for rivals, including in Italy, where ongoing takeover battles have drawn in Credit Agricole. Italy is its biggest market outside France.
Outgoing chief executive Philippe Brassac said the French lender had no plans to buy Italy’s third-largest lender Banco BPM, the subject of an unsolicited bid from UniCredit after Credit Agricole raised its stake in BPM in December to 15.1 per cent.
“Our only motivation is to defend our own interests, we are not biased,” Brassac said.
Credit Agricole became BPM’s main investor in 2022, shortly after an earlier aborted takeover attempt of BPM by UniCredit.
The French lender partners with BPM in consumer credit and insurance while Amundi has a distribution contract with UniCredit that runs out in 2027.
SAS Rue La Boetie, the controlling entity of Credit Agricole, said in a separate statement that it intended to buy up to 500 million euros worth of Credit Agricole’s shares by third quarter-end.
It currently owns 62.76 per cent of Credit Agricole. REUTERS
