French bank Credit Agricole said first-quarter profit dropped by 75 per cent, hurt by Greek losses.
The bank slumped 4 per cent in Paris trading after reporting net income of €252 million, less than the €482 million-euro average estimate of five analysts
Credit Agricole booked €940 million of net losses related to Emporiki Bank of Greece, the Athens-based unit it acquired in 2006, and Greek bond writedowns resulting from the nation's sovereign debt restructuring.
The French bank is struggling to staunch losses from Greece after reporting its first annual loss last year.
Credit Agricole declined 10 cents to €3.39 on the Paris market this morning, bringing the drop this year to 22 per cent. BNP Paribas SA, France's biggest bank, declined 6.1 per cent in 2012 and Societe Generale, the country's second-largest lender by market value, is little changed this year.
The losses in Greece were partly offset by a €466 million gain after Credit Agricole repurchased its own debt.
Chief executive Jean-Paul Chifflet pledged on February 23rd to reduce "by a maximum" Credit Agricole's exposure to refinancing the Greek unit.
The net refinancing exposure to Emporiki was €4.6 billion at the end of March, compared with €5.5 billion in December, partly as deposits rose.
The losses from Greece in the first quarter included €130 million in writedowns on Emporiki's deferred-tax assets and €319 million in provisions on debt from three Greek companies as part of the country's sovereign-debt restructuring.
Credit Agricole last year reduced its Greek staff by 11 per cent to 5,100, booking €51 million in costs. The lender, which spent about €2.2 billion in 2006 to amass a controlling stake in the Athens bank, last year wrote down €359 million of remaining goodwill at the unit.
In January, Credit Agricole Group injected about €2 billion to reinforce Emporiki's capital. Mr Chifflet, who took over in 2010, last year started trimming the bank's balance sheet and Credit Agricole in December scrapped its 2014 earnings targets.
Bloomberg
