Credit Agricole quarterly profit dives more than two thirds

Credit Agricole said quarterly net income plunged 67 per cent as the French lender took a 427 million-euro (US$534 million) impairment on its stake in Italian bank Intesa Sanpaolo and its Greek Emporiki unit again weighed on results.

The bank said on Tuesday that negotiations were continuing with the European Commission and Greek authorities about a potential sale of Emporiki, which has emerged as a major drag on the bank’s valuation, but that it had not entered into more advanced talks with any bidders.

In addition to the impairment for its 5 per cent stake in Intesa, the bank was hit by a 370 million- e uro charge for Greece, as well as 16 million for the cost of its restructuring plan to reduce its balance sheet and cut dollar funding needs.

The bank’s second-quarter net income group share fell to 111 million euros from 339 million in the year- a go quarter, although it still exceeded some analysts’ e xpectations of a low double-digit loss in the period.

Credit Agricole, which is 56 per cent controlled by an alliance of cooperative regional banks, has been selling off assets from loans to business units as it retreats from an ill-fated expansion binge and returns to its French retail banking roots.

Credit Agricole said it had made additional progress towards raising its core Tier 1 ratio but did not disclose where the ratio currently stands according to Basel III, the tougher standards taking effect in coming years.