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Credit Agricole Gains As Profit Beats Estimates

France’s third largest bank by market value Credit Agricole SA (EPA:ACA), rose in Paris trading after posting analyst-beating first quarter estimates.

 Credit Agricole logo

Credit Agricole SA (EPA:ACA) said its first-quarter net income jumped 50.7 percent, citing a steady decline in expenses in a mediocre economic environment. The company said its expenses will continue to contract and aims to lower operating expenses by 650 million euros by 2016.

However, JPMorgan Chase & Co. (NYSE:JPM) Cazenove in its Europe Equity Research Report released today feels Credit Agricole’s Q1 13 results a bit disappointing on Assets Gathering and International Retail. J.P. Morgan expects some small downgrades to consensus expectations.

On the positive side JPMorgan Chase & Co. (NYSE:JPM) commends Credit Agricole SA (EPA:ACA) for maintaining cost of risk under control in French retail and Italian consumer finance. Besides it feels Credit Agricole’s capital progression remains on track with 50 bp improvement in Basel 2.5 Core Tier I, excluding the impact from the new insurance treatment.

Delphine Lee and the team at JPMorgan Chase & Co. (NYSE:JPM) observe Credit Agricole’s CASA reported underlying pretax of euro 896 million, beating J.P Morgan’s euro 629 million. From a divisional performance perspective, French retail was marginally better but Asset Gathering and International Retail missed consensus expectations.

The report further observes Credit Agricole’s asset quality is still resilient with group provisions declined to 68 bp vs. 81 bp in Q4 12 and 73 bp in Q1 12, reflecting decrease at Agos.

In its today’s report, J.P. Morgan has assigned neutral rating to Credit Agricole SA (EPA:ACA).

Credit Agricole’s CEO Jean-Paul Chifflet remarked the first-quarter results showed the stability of the bank’s key businesses following the disposal of its Emporiki unit in Greece. He also reiterated the bank aims for “significantly positive” net income in 2013 following two consecutive years of annual deficits.

During March, Credit Agricole SA (EPA:ACA) indicated that it aims to reach a 12 percent return on equity, a profitability measure, at the corporate and investment bank over the “medium term” by cutting fixed costs by about 15 percent compared with 2011.

BNP Paribas last week reported a smaller decline in first- quarter profit than analysts estimated, helped by French and Belgian consumer banking.  France’s second-largest bank by market value, Societe Generale today announced its first-quarter results showing a 50 percent fall.


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