Crédit Agricole Q4 Profit Down 39% on One-Off Charge

Key Financial Highlights

Crédit Agricole reported a 39% decline in its fourth-quarter net profit to 1.03 billion euros. This was primarily driven by a one-off charge related to its stake in Italy's Banco BPM and increased operational costs. Despite the drop, both profit and revenue surpassed analyst expectations, with revenue reaching 6.97 billion euros.

Performance Overview

The bank's results were impacted by a 607 million-euro non-cash charge after it increased its stake in Banco BPM. Operating expenses rose 4.7% to 4.1 billion euros, while its car-leasing joint venture, Leasys, recorded a 111 million euro loss. However, the lender benefited from higher interest rates, which boosted its international and corporate banking divisions, and its net interest margin in France grew by over 11%.

Strategic Outlook and Market Impact

Crédit Agricole continues to focus on strengthening its presence in Italy, aiming for increased representation on Banco BPM's board. The bank also set aside more funds for potential bad loans, with its cost of risk increasing by 5.9%. Looking ahead, the company proposed a dividend of 1.13 euros for 2025, a 3% increase from the previous year, signaling confidence despite the challenging quarter.

Conclusion

Crédit Agricole's fourth quarter presented a mixed financial picture. While a significant one-off charge and rising costs weighed on profitability, the bank's core revenue streams showed resilience and beat market forecasts. Investor focus will likely remain on its cost management and strategic expansion in the Italian market.

FAQ

Q: Why did Crédit Agricole's profit fall in Q4?
A: The profit decline was mainly due to a 607 million-euro charge from its increased investment in Banco BPM, rising operating costs, and losses in its car-leasing business.

Q: Did Crédit Agricole's performance meet expectations?
A: Yes, despite the profit drop, its net income of 1.03 billion euros and revenue of 6.97 billion euros both exceeded analysts' forecasts.

Source: Investing.com