Credit Agricole back in profit as Europe recovers

Credit Agricole, France's third- largest bank, swung to a fourth-quarter profit from a record loss a year earlier, helped by a tax rebate and earnings from French consumer banking.

Net income was €612 million (HK$6.5 billion), the bank said in a statement, missing the €677 million average estimate of eight analysts surveyed by Bloomberg. Credit Agricole reported a loss of €3.98 billion a year earlier after writedowns from selling assets including its Greek unit Emporiki Bank.

Europe's economy is emerging from a record-long recession, helping Credit Agricole's revenues from banking in France and from insurance. The bank, led by chief executive Jean- Paul Chifflet, has trimmed its balance sheet since mid-2011 and returned to an annual profit last year after two consecutive full-year losses.

Credit Agricole's shares declined less than 0.1 per cent in Paris trading yesterday, keeping gains over the past 12 months at 49 per cent and valuing the company at €27 billion. BNP Paribas, France's largest bank, rose 29 per cent in the period and the Bloomberg Europe Banks & Financial Services Index advanced 16 per cent.

Credit Agricole said it will pay a dividend of 35 euro cents per share, the first payout since 2011. The holding company that represents Credit Agricole's regional banks, which jointly own a majority stake, plans to opt for a dividend payment in new shares, it said in the statement.

Last week, Societe Generale, France's No2 bank, said it will more than double its dividend after posting a €322 million fourth-quarter profit compared with a €471 million loss a year earlier. BNP Paribas reported a 76 per cent decline in fourth-quarter profit as it set aside US$1.1 billion tied to a review of payments to parties subject to United States economic sanctions.