Credit Agricole seals $1.25 billion broker sale to CITIC

HONG KONG/PARIS Mon Nov 5, 2012 9:41am EST

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HONG KONG/PARIS (Reuters) - French lender Credit Agricole (CAGR.PA) sealed the $1.25 billion sale of Asian brokerage CLSA to China's CITIC Securities (6030.HK) on Monday, marking another pullback from its international business in the wake of the euro zone crisis.

The two-part deal, first announced in July when CITIC bought 19.9 percent of CLSA and pledged to buy the rest within months, should close around mid-2013 but must still be approved by regulators, Credit Agricole and CITIC said in a joint statement.

There was little detail on how much of a capital gain Credit Agricole might reap from the sale. Analysts have estimated that the deal will give a boost to the French bank's solvency ratios via the cash inflow and slimming down of its balance sheet.

"The numbers are the same as previously announced, but at least the timing came in sooner than expected," a Paris-based bank analyst said. CITIC had until mid-2013 to exercise its option to buy the remaining 80 percent of CLSA for $942 million.

The news comes after a wave of international cutbacks by French banks, which profited from cheap debt during the boom times to build empires abroad. Credit Agricole and rival Societe Generale (SOGN.PA) both sold their Greek units last month in a bid to stem losses in the recession-wracked euro economy.

Credit Agricole also said on Monday it had sold its Turkish investment-bank subsidiary to Standard Chartered (STAN.L), an Asia-focused bank based in London. StanChart refused to disclose the price paid but said it would take on 15 staff in the deal.

BROKERAGE EXIT

CLSA, which employs 1,500 people across 20 cities in Asia as well as in the UK and the United States, was acquired by Credit Agricole in 2003 when the bank took over collapsed lender Credit Lyonnais.

The sale brings Credit Agricole a step closer to exiting the brokerage business almost entirely.

The bank is trying to return to its retail-banking roots under new management after the 2008 financial crisis and is also in talks to sell European broker Cheuvreux to Paris-based Kepler Capital Markets.

Banks across Europe are under pressure to sell assets and exit business lines to meet new Basel III rules designed to crack down on risk. Switzerland's UBS UBSN.VX recently announced 10,000 staff cuts and a plan to exit fixed-income.

The Cheuvreux deal, which is likely to be finalized by early 2013 after an initial estimate of November 2012, has led Credit Agricole to plan several hundred job cuts at the broker before the sale, sources told Reuters last month. [ID:nL6E8L1NNR] (Reporting by Kelvin Soh in Hong Kong and Lionel Laurent in Paris; Editing by Anne Marie Roantree)

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