Agricole, Natixis earnings plunge on market turmoil
PARIS (Reuters) - French banks showed the scars of the financial crisis on Thursday, with heavy asset writedowns stripping Credit Agricole (CAGR.PA) of all but a sliver of profit and plunging Natixis (CNAT.PA) to a billion euro loss.
Agricole, France's biggest retail bank, revealed a 94 percent fall in second-quarter profit, hit by another loss at its Calyon investment bank, while second-tier Natixis sank to a loss of 1.02 billion euros ($1.51 billion) from a profit of 1.01 billion a year ago, after 1.5 billion euros of writedowns.
"This is the most significant, most violent and most long-lasting of all the financial crises we've had since the war," Natixis Chief Executive Dominique Ferrero told French business radio station BFM.
Earlier this month, France's other two big banks also reported tumbling second-quarter figures, with Societe Generale's (SOGN.PA) net profit down 63 percent and BNP Paribas (BNPP.PA) showing a 34 percent fall.
Agricole's net profit shrank to just 76 million euros from 1.29 billion euros a year earlier. Gross operating profit also dropped 94 percent from last year to 102 million euros.
A Reuters poll of 18 analysts had given a wide range of earnings forecasts for Agricole, from a net loss of 597 million euros to a profit of 970 million.
The bank's performance was hit by around 1.1 billion euros of writedowns related to the credit crisis and monoline insurers, which Agricole said had a negative impact of 693 million euros on Calyon's earnings.
Calyon made a second-quarter net loss of 855 million euros. The Reuters poll gave an average estimate for a Calyon loss of 604 million euros, with estimates on writedowns ranging from 600 million to 2.36 billion euros.
Iris Finance fund manager Michael Sellam, whose portfolio includes both Agricole and Natixis shares, said one positive item in Agricole's results was the fact that the writedowns were not as bad as some had feared.
"People are saying that we're not far from the end of the tunnel for Agricole," said Sellam.
NATIXIS RIGHTS ISSUE
Agricole shares reversed earlier losses to rise 4.4 percent in mid-morning trade, while Natixis stock was down 7.7 percent. Agricole shares have fallen around 35 percent since the start of the year, while Natixis stock has plunged around 60 percent.
Agricole, which recently ousted Marc Litzler as Calyon chief executive, aims to cut costs and trim the division, which has been making losses for several quarters.
Agricole completed a 5.9 billion euro rights issue in July to shore up its finances and has also pledged 5 billion euros' worth of asset sales. The bank has said it will not make any major acquisitions in the near future.
Natixis is also in the process of putting together a 3.7 billion euro rights issue designed to strengthen its finances. Continued...
