Credit Agricole has reported a drop in fourth-quarter net profit, hurt by a write-down on its domestic retail arm.
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The Paris-based lender, France's second-largest listed bank by assets, said Wednesday that net profit fell 67% to 291 million euros ($308 million) in the three months through December from EUR882 million a year ago. That undershot analysts' expectations of EUR301 million, according to data provider FactSet.
Revenue was up 7% at EUR4.58 billion. As with other domestic lenders, persistently low interest rates and loan renegotiations have eaten into the French bank's margins this year.
Credit Agricole booked a EUR491 million write-down on its retail bank LCL.
"There was a new wave of loan renegotiations in the second half of this year," Chief Executive Philippe Brassac said at a press conference in Paris. However, Mr. Brassac said he has seen "signs of improvement" in the fourth quarter.
LCL posted a 15% increase in net profit to EUR136 million in the quarter ended December, aided by a pickup in demand for new loans.
Net profit at its corporate and investment bank surged to EUR271 million from EUR76 million a year ago, buoyed by volatile markets.
Credit Agricole's insurance and asset-management business reported an 14% increase in net profit to EUR448 million, while net profit for its specialized financial-services business rose 15% to EUR170 million.
Net profit for its international retail-banking business, which includes Italy, Poland and Egypt, fell 38% to EUR24 million.
Despite lower earnings in the quarter, Credit Agricole's core Tier one ratio, which compares top-quality capital such as equity and retained earnings with risk-weighted assets, stood at 12.1% in December, up from 12% in September.
The bank's leverage ratio, which measures capital held by the bank against its total assets, was 5% in December, compared with 4.7% at the end of September.
The bank said it will pay shareholders a dividend of EUR0.60 a share for 2016. ■