First-half results at Crédit Agricole showed the effect of its exposure to Greece but the dent on profits at France’s third-largest bank by market value was less than analysts had feared.

The French bank, originally founded to finance farmers, took a pre-tax impairment of €202m on its Greek bonds but first-half net income was up nearly 60 per cent to €1.34bn compared with the same period last year on revenue up 5.3 per cent to €10.84bn.

Second-quarter net income dropped 10.6 per cent to €339m ($490m) on revenue up 1.1 per cent to €5.53bn, beating analyst expectations.

Jon Peace, analyst at Nomura, said that, without being extraordinary, the numbers helped contribute to a “bit of a relief rally” among French banking stocks.

Shares in Crédit Agricole rose more than 8 per cent to €6.90. Shares in BNP Paribas rose 3.93 per cent to €35.52 and Société Générale gained nearly 4 per cent to €23.05.

French banks, among Greece’s biggest creditors, have been rocked in recent weeks by the escalating eurozone sovereign debt crisis.

Crédit Agricole was the first French bank to warn the market last month that it was setting aside up to €850m in provisions due to exposure to Greece including an expected net loss at Emporiki, its Greek subsidiary, and the impact of a pledge alongside other French banks and insurers to involve all their Greek bond holdings maturing before 2020 in the Greek bail-out plan announced by eurozone leaders in July.

The results, despite the one-off Greek impact, “illustrate a positive underlying trend from an operational standpoint,” said Jean-Marie Sander, chairman.

The main impact of the bank’s Greek exposure was felt in its international retail banking division, which incurred a net loss of €754m, including a €359m impairment of goodwill and €557m of net losses at Emporiki.

Net income at Crédit Agricole’s regional banks network, which accounts for more than half of group revenue, rose 11.7 per cent in the first half to €574m.

This helped offset a 13.5 per cent drop in first half net income for corporate and investment banking operations to €709m on revenues down 1.6 per cent to €2.92bn.

Crédit Agricole reiterated its target to raise net profits fivefold by the end of 2014.

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