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Credit Agricole first quarter losses: Results fall below expectations

Crédit Agricole profits were below expectations in the first quarter, despite a better than forecast performance in its investment banking arm. The share value dropped as investors looked forward to a strategy update due in June. Citi Group claimed that the miss by Credit Agricole was mainly due to higher costs and higher taxes, with revenues broadly in-line and better provision in addition with a higher than expected contribution to the EU Single Resolution Fund during the quarter. Net income fell by 11% to EUR763m ($856m) missing analysts estimates alongside with revenues, which fell by 1.1% to EUR4.85bn ($5.4bn).

Credit Agricole shares fell by 3% on 15th May 2019, showing that shareholders are losing the trust they had placed on the bank. Credit Agricole couldn’t do anything to overcome the sell-off that its shares experienced, instead of just waiting for the event to pass. The bank stood still waiting for the tide to pass as it was unable to do anything except to buy back its own shares. For a bank such as Credit Agricole to prosper on a long-term basis it must adopt shock absorber measures. The most common shock absorber is capital. Raising capital is a crucial component which plays a vital role for the livelihood of Credit Agricole. The bank does not only need capital to play the role of a shock absorber, but it needs capital to invest activities that could be profitable for the bank in the future.

For further reading please visit: Credit Agricole Group – Mergers & Acquisitions (M&A), Partnerships & Alliances and Investments, Credit Agricole CIB SA – Company Profile & SWOT AnalysisCredit Agricole Indosuez Wealth – Strategy, SWOT and Corporate Finance Report

 

Posted in Banking.

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