Credit Agricole SA, France?s third- largest bank by market value, said first-quarter profit dropped 75 percent, hurt by Greek losses.
Net income fell to 252 million euros ($326 million) from 1 billion euros a year earlier, the bank, based near Paris, said in a statement Friday. That missed the 482 million-euro average estimate of five analysts surveyed by Bloomberg.
Credit Agricole booked 940 million euros of net losses related to Emporiki Bank of Greece SA, the Athens-based unit it acquired in 2006, and Greek bond writedowns resulting from the nation?s sovereign debt restructuring. The French bank is struggling to staunch losses from Greece after reporting its first annual loss last year.
?Credit Agricole keeps suffering because of Greece,? Valerie Cazaban, who helps manage 80 million euros at Stratege Finance in Paris and has shares in the bank, said in an interview before the earnings were released. In Greece, the French bank ?can?t lock out its positions, it is extremely difficult.?
Credit Agricole has fallen 20 percent this year in Paris trading. BNP Paribas SA, France?s biggest bank, declined 4.3 percent and Societe Generale SA, the country?s second-largest lender by market value, rose 1.7 percent.
The losses in Greece were partly offset by a 466 million- euro gain after Credit Agricole repurchased its own debt.
Chief Executive Officer Jean-Paul Chifflet pledged on Feb. 23 to reduce ?by a maximum? Credit Agricole?s exposure to refinancing the Greek unit. The net refinancing exposure to Emporiki was 4.6 billion euros at the end of March, compared with 5.5 billion euros in December, partly as deposits rose.
The losses from Greece in the first quarter included 130 million euros in writedowns on Emporiki?s deferred-tax assets and 319 million euros in provisions on debt from three Greek companies as part of the country?s sovereign-debt restructuring.
Credit Agricole last year reduced its Greek staff by 11 percent to 5,100, booking 51 million euros in costs. The lender, which spent about 2.2 billion euros in 2006 to amass a controlling stake in the Athens bank, last year wrote down 359 million euros of remaining goodwill at the unit.
In January, Credit Agricole Group injected about 2 billion euros to reinforce Emporiki?s capital. Chifflet, who took over in 2010, last year started trimming the bank?s balance sheet and Credit Agricole in December scrapped its 2014 earnings targets.
US and European stocks rose Thursday, and the euro snapped the longest slide since 2008, on signs Greece might break a political deadlock following May 6 elections. Evangelos Venizelos, the Greek socialist Pasok leader and former finance minister, began a last-ditch effort to form a coalition that would avert a new election and keep the country in the euro.
French banks have been embroiled in Europe?s debt crisis as they held $620 billion in private and public debt in Greece, Portugal, Ireland, Italy and Spain at the end of December, the world?s largest such holdings by foreign lenders, according to the Bank for International Settlements.
Credit Agricole, like BNP Paribas and Societe Generale, is cutting investment-banking jobs and assets as the debt crisis curbs access to funding in dollars and regulators impose stricter capital rules. Credit Agricole reduced its funding needs by 35 billion euros in the nine months through the end of March out of a target of 50 billion euros by the end of 2012, it said.
Most of Credit Agricole?s balance-sheet cuts come from its corporate- and investment-banking unit. The division, which is shedding 1,750 jobs and closing operations in 21 countries, aims for ?medium-term? annual revenue of 5.4 billion euros compared with 4.73 billion euros in 2011, the bank said in April.
First-quarter profit at the unit was 156 million euros, hurt by 246 million euros of net costs related to its balance- sheet trimming plans, Credit Agricole said. Revenue from continuing capital-market and investment-banking operations fell 2.6 percent to 899 million euros, the bank said.
Earnings from the regional banks? French consumer network were 372 million euros, compared with 374 million euros a year earlier. The LCL French consumer-banking network had 204 million euros of profit, up from 195 million euros a year earlier.
Earnings at the asset management, insurance and private banking division rose 22 percent to 116 million euros, helped by inflows at fund-management division Amundi.
In Italy, Credit Agricole?s largest market by staff outside of France, the Cariparma branch network contributed profit of 31 million euros. Credit Agricole?s specialized financial-services unit had a 28 million-euro loss, hurt by a 280 million-euro provision at Italian unit Agos.