for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up
Banks

UPDATE 2-C.Agricole Q2 profit plunges on Calyon loss

(Adds analyst comment)

PARIS, Aug 28 (Reuters) - Credit Agricole CAGR.PA, France's biggest retail bank, reported a 94 percent fall in second quarter profit on Thursday with earnings hit by a widely expected loss at its Calyon investment banking division.

Agricole is the last of France’s top three banks to post results for the second quarter, during which the credit crisis continued to weigh on the global financial sector.

Net profit fell to 76 million euros ($111.8 million) 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 gave a wide range of earnings forecasts for Agricole, ranging from a second quarter net loss of 597 million euros to a profit of 970 million. The average net profit forecast stood at 199 million euros.

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 mln euros on Calyon’s earnings.

Calyon made a second quarter net loss of 855 million euros.

“There was a major shortfall in CIB (corporate and investment banking) but the other divisions were broadly in line,” said West LB analyst Christoph Bossmann, who kept a “hold” rating on Agricole.

Earlier this month, Societe Generale SOGN.PA reported a 63 percent decline in net profit, while France's biggest listed bank, BNP Paribas BNPP.PA, posted a 34 percent fall.

Calyon has been loss-making for several quarters, causing Agricole to take steps to trim the business, cut its costs and oust Marc Litzler as its chief executive.

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.

Agricole shares closed down 0.8 percent at 13.21 euros on Wednesday. The stock has fallen around 40 percent since the start of the year, compared to a 33 percent fall in the DJ Stoxx European bank sector. (Reporting by Sudip Kar-Gupta; Editing by Richard Hubbard/Andrew Callus)

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up