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Credit AgricoleFrance’s second-largest listed bank on Friday posted a better-than-forecast 55% rise in first-quarter net profit, helped by corporate and investment banking sales that outperformed rivals.
Net profit rose to 1.9 billion euros ($2.04 billion) within the January-March period, above the 1.48 billion euro average of 19 analyst estimates prepared by the corporate.
Sales rose 11% to six.81 billion euros, exceeding analyst expectations of 6.47 billion euros. The risk costs, i.e. the reserves for non-performing loans, amounted to 400 million euros, 105 million euros lower than expected.
European banks’ first-quarter profits largely beat expectations, with the boost from higher rates of interest still supporting lenders’ bottom lines and propelling their stocks to multi-year highs.
Despite the general increase in sales, retail sales in France rose just 1.8%, in response to Credit Agricole, while the web interest margin, the difference between what a bank earns on loans and what it pays out on deposits, remained stable.
French banks haven’t benefited as much from the speed hike as their peers because they must pay higher deposits and a highly regulated mortgage market squeezes margins. Analysts expect them to perform higher as rates of interest fall.
Credit Agricole, which is controlled by 39 regional banks, said it was on the right track to fulfill its 2025 financial targets a yr early. The targets include an annual adjusted net profit of greater than 6 billion euros and a return on tangible equity of greater than 12%.
The lender said revenue in its corporate and investment banking business, which accounts for 1 / 4 of total revenue, rose 4% from a yr earlier, driven by money management and company leveraged finance.
Fixed income, currencies and commodities (FICC) trading revenue shrank 3%, consistent with Wall Street banks but outperforming French rival BNP Paribas, which reported a 20% decline.
Société Générale, which also released its quarterly results on Friday, said fixed income and currency sales fell 17% within the period.
Interbank FICC trading was weaker than in 2023 as volatile markets calmed down.
Credit Agricole also controls Europe’s largest fund manager Amundiowns asset management corporations and is expanding into asset management.
