* 838 mln euro Emporiki tax hit latest Q4 blow
* Sees significantly positive 2013 result
* No dividend on 2012 results
* Q4 loss 3.98 bln euros
* Shares up 4.4 pct
(Recasts lead, adds analyst comment)
By Christian Plumb and Matthias Blamont
PARIS, Feb 20 Credit Agricole on
Wednesday posted its biggest full-year loss since it went public
11 years ago, hit by unexpected costs from exiting Greece,
weaker revenues and hefty asset writedowns.
Investors warmed to the French bank's promise of a
turnaround in 2013 and a pledge to cut 650 million euros from
costs by 2016 through savings on back-office technology,
equipment and real-estate.
But it will pay no dividend after posting a net 2012 loss of
6.5 billion euros ($8.7 billion), hit by a surprise 838 million
euro tax demand linked to the sale of Greek unit Emporiki.
Striking a more confident tone for this year, chief
financial officer Bernard Delpit said the bank expected to post
"significantly positive" results in 2013.
Credit Agricole shares were up around 4.4 percent, to 7.67
euros, by 1612 GMT, making them the top gainers in the European
sector, with investors buoyed by the optimistic outlook
and a promise of a strategic plan in the fall with financial
The 119-year-old lender has spent the last year grappling
with the legacy of ill-fated expansion binges into Italy, Spain
and Greece, and shrinking its investment bank to focus on French
Domestic rivals such as BNP Paribas and Societe
Generale have also promised more detail on strategy
Like European peers, French banks are under pressure to find
paths to growth against a backdrop of recession in the eurozone,
rising regulation and uncertain financial markets.
"The bank has options to improve its solvency and appears to
be cautiously optimistic for 2013," Natixis analyst Alex Koagne
said, citing its solid underlying business and its deposit-rich
parent network of regional lending banks. "Analysts may end up
upgrading their (profit) forecasts."
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Bank executives told reporters an unexpected decision by
French tax authorities to disallow a tax deduction the bank was
seeking for the sale of Emporiki Bank triggered an 838 million
euro tax hit, pushing fourth-quarter writedowns to 4.53 billion.
"The government told us very recently - (Monday) to tell the
truth - that we could no longer deduct taxes from these losses,"
Delpit told a conference call.
"Leaving Greece cost us dearly but it was a necessary
decision," said Chief Executive Jean-Paul Chifflet.
"In 2012, we turned the page and profoundly transformed the
group," he added.
The tax bill, on a 2.9 billion euro capital injection into
Emporiki by Credit Agricole prior to the Greek bank's sale to
Alpha Bank, had been in dispute because the transaction took
place before a change in French tax law in August.
"It seems like the Emporiki capital increase took place
before the change of policy by the government," said one
London-based analyst. "It shows the attitude toward the banking
sector really. It seems to be retroactive."
Socialist President Francois Hollande declared in last
year's presidential campaign that he viewed the world of finance
as his enemy, although he has since unveiled a banking reform
bill widely seen as treating the sector with kid gloves.
Perhaps more importantly, France has been struggling to meet
public-deficit targets, raising pressure on the government to
tighten its belt and also find new revenue sources.
The tax expense, on top of previous writedowns mostly
related to the impact of a worsening economic outlook on
goodwill, pushed the quarterly loss at France's No. 3 bank to
3.982 billion euros.
It said its "normalised" profit excluding one-off items rose
10 percent from a year ago to 548 million euros, ahead of the
402 million forecast in a Thomson Reuters I/B/E/S poll.
Chifflet said the bank was "working to respond to the
external inquiries" relating to Libor and Euribor, adding that
the bank had made no specific provisions for expenses concerning
So far this year, Credit Agricole shares have surged 23
percent, nearly triple the rate of gain in the sector, as
investors have flocked to riskier, higher volatility stocks and
analysts bet that it offers good value.
The bank trades at 0.47 times book value, compared with an
average ratio of 0.69 for peers, according to Thomson Reuters
Quarterly revenue fell 23 percent including the negative
accounting impact of the rising value of the bank's own debt to
3.33 billion euros, compared with a forecast for 3.69 billion.
($1 = 0.7487 euros)
(Additional reporting by Jennifer Clark in Milan and Lionel
Laurent in Paris; Editing by David Cowell)