Credit Agricole close to Emporiki deal
Deal to sell its troubled Greek arm could be wrapped up within weeks
Paris: Credit Agricole said a deal to sell its troubled Greek arm could be wrapped up within weeks, as costs stemming from the Eurozone’s most depressed economy again hammered the French bank’s quarterly results.
Credit Agricole said on Tuesday talks were continuing with the European Commission and Greek authorities about a sale of Emporiki, a major drag on the bank’s valuation, adding it had not entered more advanced negotiations with any bidder.
Chief executive Jean-Paul Chifflet said on a conference call a deal leaving it with a maximum stake of 10 percent in Emporiki could be reached with one of three bidders in “a matter of weeks”.
Credit Agricole said it financed a 2.3 billion euro (Dh10.58 billion, $2.9 billion) capital hike at Emporiki in July through its 4.6 billion net funding to the bank. Some Emporiki shipping loans will be transferred to Credit Agricole from next month.
In another sign of how Credit Agricole has been retreating from once lofty international expansion plans, it cut its stake in Intesa Sanpaolo - Italy’s largest bank - below 2 percent from 5 percent, resulting in a 427 million euro charge.
Credit Agricole, founded more than 100 years ago as a French farmers’ lender, was hit by a 370 million euro charge for Greece, as well as 16 million for the cost of a restructuring plan to reduce its balance sheet and cut dollar funding needs.
Its second-quarter net income group share fell 67 percent to 111 million euros.
Credit Agricole, whose shares were up 2.7 percent in early trading in Frankfurt, is 56 percent controlled by an alliance of cooperative regional banks.
It has been selling assets from loans to business units as it retreats from an ill-fated expansion binge and returns to its French retail banking roots.
Credit Agricole said it had made additional progress towards raising its core tier 1 ratio but did not disclose where the ratio currently stands according to Basel III, the tougher standards taking effect in coming years.
The metric, which shows a bank’s ability to withstand losses, is closely watched by investors.
Revenue slid 14 percent in the quarter to 4.75 billion euros as the investment banking arm was hit by a downturn in capital markets activity and retail revenue was boosted by higher interest income.
