Credit Agricole profit down 67%
Credit Agricole, France's third-largest bank, posted a 67 per cent decline in second-quarter profit, hurt by losses in Greece and a writedown of its stake in Italy's Intesa Sanpaolo.
Net income fell to €111 million from €339 million a year earlier, the bank said in a statement today.
Credit Agricole, led by chief executive officer Jean-Paul Chifflet, is shutting its riskiest investment-banking activities and weighing offers from Greece's three largest banks for its Emporiki unit in the country, which is stuck in a five-year recession.
The bank said it is still studying binding offers.
"No decision has been made on entering into more advanced talks regarding any of these proposals," Credit Agricole said in the statement.
Discussions are continuing with the Bank of Greece, the Hellenic Financial Stability Fund and the European Commission "on the terms and conditions to which the transaction would be subject," the bank said.
National Bank of Greece and Eurobank Ergasias this month submitted bids for Emporiki, joining Alpha Bank, Greece's third-largest lender, in their pursuit of Credit Agricole's unprofitable Athens-based unit.
Emporiki's loan book makes Credit Agricole the foreign bank with most to lose should Greece exit the euro. Capital Increase Credit Agricole in July provided €2.3 billion in capital to Emporiki by converting a portion of its funding to the Greek unit into equity.
Following the capital injection, Credit Agricole's equity exposure to Emporiki was €2.7 billion and its net funding exposure fell to €2.3 billion.
The bank booked €370 million of losses in Greece in the second quarter, as well as a €427 million charge on its holding in Milan-based Intesa, Italy's second-largest bank.
Greece is overhauling its banks after lenders sustained losses on their holdings of government bonds in the country's debt swap, the biggest sovereign restructuring in history.
The country obtained a €130 billion bailout in March from the European Union and International Monetary Fund which earmarked €50 billion for recapitalising its banks.