Crédit Agricole SA reported its first quarterly loss since the company went public in 2001 after it added to asset writedowns linked to U.S. subprime mortgages.
Crédit Agricole SA is the largest retail banking group in France , second largest in Europe and the eighth largest in the world by Tier 1 capital according to The Banker magazine.
The fourth-quarter loss of 857 million euros ($1.3 billion), which missed analysts' estimates, compared with a profit of 1.1 billion euros a year earlier. The company rose in French trading after saying it will increase its dividend 4.3 percent to 1.20 euros a share.
Credit Agricole's 3.3 billion-euro markdown was more than the 2.5 billion euros Chief Executive Georges Pauqet forecast in December and prompted the company to say today it will beef up risk management. The lender is the most affected of the French banks by declining values of debt securities and rating downgrades of bond insurers, which have led to more than $180 billion of charges at the world's biggest financial firms.
Credit Aqricole rose 40 cents, or 2.3 percent, to 17.61 euros at 9:36 a.m. in Paris . It has dropped 23 percent this year, while BNP Paribas SA, the largest French bank, has declined 21 percent. Societe Generale SA, the worst-performer among France 's three biggest banks this year, has lost 25 percent.
Because of the writedowns, Credit Agricole's Calyon investment-banking unit had a loss of 1.9 billion euros in the quarter, compared with a profit of 255 million euros a year earlier. Banks may face as much as $203 billion in additional writedowns, partially because of a bond-insurance crisis, UBS AG forecast last month.
Chief Financial Officer Bertrand Badre states that he results were affected by an unprecedented crisis in credit markets.
Net income at the French regional retail banks rose 1 percent to 223 million euros in the quarter, while profit from international retail banking fell 11 percent to 107 million euros because of the integration costs from acquiring banks in Italy and Greece.
Societe Generale, France's second-largest bank by market value, had a 4.9 billion-euro trading loss and wrote down the values of debt securities by 2.05 billion euros in the fourth quarter, resulting in a record 3.35 billion-euro loss.
BNP Paribas last month reported a 42 percent decline in fourth-quarter profit to 1.01 billion euros after taking provisions and writedowns of 1.2 billion euros for the full year.
BNP Paribas is one of the main banks in Europe. It was created through the merger of Banque Nationale de Paris (BNP) and Paribas. Together with Société Générale and Crédit Lyonnais, it is one of the "three old" banks of France.
Credit Agricole decided to add to its provisions against bond insurers because several were downgraded or threatened with downgrades at the beginning of the year, Badre said.
Analysts estimated a fourth-quarter loss of 554 million euros. Profit excluding the impact of the credit-market crisis would have been 1.29 billion euros, Credit Agricole said.
The bank doesn't plan any major acquisitions this year, Badre said.
"The focus is on integration and organic growth,'' he said. Badre declined to say if Credit Agricole will take advantage of the decision by Spanish banking regulators allowing it to raise its stake in Bankinter to 29.9 percent from the 20 percent it holds now.
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