By Elena Vardon
Credit Agricole S.A. reported a dip in its first-quarter profit due to an exceptional tax impact and heavier costs despite logging higher revenue for the period, sending its shares lower.
The French lender made 1.82 billion euros ($2.08 billion) in net profit--or net income group share--for the three months ended March 31, down 4.2% compared with the same period a year prior, on higher operating expenses and a temporary levy imposed on large corporates in its home market, it said Wednesday. The result slightly missed the 1.87 billion euro estimate taken from a Visible Alpha poll.
"Credit Agricole S.A. posted record revenues this quarter and high profitability," Philippe Brassac said in what are his last set of results as chief executive before he retires and hands over to Olivier Gavalda after a decade at the helm.
Revenue grew 6.6% to 7.26 billion euros, driven by the performance of its asset-gathering division, which includes its insurance activities, and its corporate and investment bank that was helped by the integration of Belgium's Degroof Petercam and volatile markets. This more than compensated a weaker performance in its retail activities in France.
The bank reached a 15.9% return on tangible equity, a key profitability metric, for the period. Its common Tier 1 equity ratio--a measure of balance-sheet strength--stood at 12.1%, against expectations of a 11.8% ratio.
Its shares traded around 4% lower in midday European trading at 16.5 euros on the back of what analysts described as mixed and slightly underwhelming results.
Credit Agricole S.A. is the listed vehicle of the 39 regional banks which make up Credit Agricole Group. It has made Italy its biggest market beyond France through acquisitions dating back three decades and has been pulled into the wave of banking deals playing out in the country after a surprise takeover bid was launched by UniCredit on Banco BPM. "We are not actors in this consolidation as such," Brassac said in a call with journalists.
Credit Agricole has commercial partnerships with BPM and is its largest shareholder, having recently upped its stake. It also has distribution agreements through its asset manager Amundi with UniCredit that are critical to its sales in Italy.
The flurry of bids which followed the move--with Mediobanca, Monte dei Paschi di Sienna and other smaller banks scurrying to play a role in the reshaping of the sector--has created a situation that hasn't yet stabilized and is difficult to predict, Brassac said.
He added that the group hasn't yet decided on the fate of its almost 20% holding in BPM but that it will act in its own interest. The period to tender shares opened this week and will run until late June but conditions imposed by the Italian government to approve the deal cast uncertainty as UniCredit put its decision on hold as it sees the prescriptions potentially constraining the operations of the combined entity.
Write to Elena Vardon at elena.vardon@wsj.com
(END) Dow Jones Newswires
04-30-25 0640ET
