ECONOMY

In Brief

Greek division hurts Credit Agricole earnings Credit Agricole SA, France’s second-largest bank, reported a fourth-quarter loss, hurt by writedowns stemming from the worst financial crisis since the Great Depression and its unprofitable Greek division. The bank fell as much as 4.1 percent in Paris trading after reporting a net loss of 309 million euros ($386 million), exceeding the 19-million-euro loss estimate of analysts in a Bloomberg survey. Credit Agricole, which is cutting 500 jobs and scaling back risk at its investment bank to limit losses, announced a 671-million-euro loss at its international consumer banking unit. The loss includes a 254-million-euro goodwill writedown at its Greek bank, where loan-loss provisions swelled as the economy slowed. «We do not expect the crisis to be over before the second half of 2010,» CEO Georges Pauget said on a conference call with reporters. «It’s very tough to give an outlook» on how the crisis will evolve, he said. (Bloomberg) Sale of 10-year bond raises 7.5 billion euros Greece raised 7.5 billion euros ($9.4 billion) from a sale of 10-year bonds priced at 301.6 basis points over a German Bund maturing in January 2019, the country’s debt agency said yesterday. Domestic investors scooped up 55 percent of the issue, the head of the agency said. Investors from the European Union accounted for another 30 percent with Far East and US institutions taking a 15 percent share. «The size was increased as the spread was adequately higher than the German bond making the issue very attractive,» a bond trader at a large Greek bank said, asking not to be named. «Because of the strong demand from investors, the Greek debt agency seized the chance to raise 7.5 billion euros to cover the increased funding needs for this year.» Strong risk aversion among investors has led to the yield spread between Greek and German bonds widening in recent months. The spread on 10-year bonds hit a record high since the launch of the euro, reaching more than 300 basis points in February. The spread stood at 269 basis points yesterday. (Reuters) Cyprus taxes Cyprus’s earnings from taxes on property transactions slumped 84 percent in January, reflecting a stagnant housing market. Capital gains tax returns, which represent state earnings mainly from construction and house sales, slumped to 4.16 million euros in January, compared to January 2008 earnings of 26.7 million euros. Data of the inland revenue department showed the immovable property tax – a nominal rate – down 35 percent. Overall, total tax receipts were down 4 percent year-on-year at 229.3 million euros. (Reuters) Romanian growth Romania’s economic growth fell sharply to 2.9 percent in the fourth quarter of 2008, from 9.2 in the third, well below market expectations, due to declining demand and industrial activity, data showed yesterday. Full-year growth stood at 7.1 percent, the Statistics Office said. However, analysts surveyed by Reuters expected the economy to grow by 3.5 percent in the fourth quarter and by 7.3 percent in 2008. (Reuters)