By Mathieu Rosemain
PARIS (Reuters) -Credit Agricole SA, France’s second-biggest listed bank, exceeded quarterly earnings forecasts on Wednesday with a 27% jump in profit, driven by insurance and asset management even as gains in its investment banking business lagged rivals.
The lender is the latest to benefit from soaring demand from clients wanting to trade in global markets, particularly in the final three months of 2024, with rival BNP Paribas beating expectations on Tuesday.
Credit Agricole said net income for the three months ending in December rose 27% from a year earlier to 1.69 billion euros ($1.8 billion), beating the 1.32 billion-euro analyst average estimate it had compiled.
Revenue came in at 7.1 billion euros, up 17%, also above an average forecast of 6.53 billion euros.
The strong fourth quarter enabled Credit Agricole to report record full-year sales and net income, the latter totalling more than 7.1 billion euros.
Analysts at Royal Bank of Canada saluted a “strong set of results” in a note to clients.
Credit Agricole’s shares were up 1.2% in early Paris trading, outperforming France’s benchmark blue-chip index CAC 40
The group’s asset management arm, Amundi, Europe’s largest fund manager, saw sales grow by 14.5% year-on-year.
Sales at Credit Agricole’s investment banking unit increased 7.7% to a record 1.57 billion euros, a smaller rise than elsewhere.
Sales from trading in fixed income, currencies and commodities, while rising 17%, underperformed BNP and below the average 26% year-on-year increase recorded by Wall Street companies, according to Jefferies.
The listed entity of the larger Credit Agricole Group, composed of 39 regional banks, said its insurance business saw sales surge by 37%, notably thanks to growth in assets under management.
The lender said it would propose a dividend of 1.10 euro per share, up 5% from a year earlier.
GOALS MET EARLY
Credit Agricole said it had reached as expected its 2025 targets a year in advance, including a return on tangible equity of more than 12%.
The bank did not provide a new set of targets for 2025.
Bumper profits have left European banks flush with cash and encouraged some CEOs to bid for rivals, including in Italy, where ongoing takeover battles have drawn in Credit Agricole. Italy is its biggest market outside France.
Outgoing Chief Executive Philippe Brassac said the French lender had no plans to buy Italy’s third-largest lender Banco BPM, the subject of an unsolicited bid from UniCredit after Credit Agricole raised its stake in BPM in December to 15.1%.
“Our only motivation is to defend our own interests, we are not biased,” Brassac said.
“Key questions from here for Credit Agricole remain Italian development plans as well as new MTP (medium term plan) targets and ambitions from the new CEO (Olivier Gavalda),” Barclays said in a note.
Credit Agricole became BPM’s main investor in 2022, shortly after an earlier aborted takeover attempt of BPM by UniCredit.
The French lender partners with BPM in consumer credit and insurance while Amundi has a distribution contract with UniCredit that runs out in 2027.
SAS Rue La Boetie, the controlling entity of Credit Agricole, said in a separate statement that it intended to buy up to 500 million euros worth of Credit Agricole’s shares by the end of the third quarter.
It currently owns 62.76% of Credit Agricole.
($1 = 0.9633 euros)
(Reporting by Mathieu Rosemain;Editing by Tommy Reggiori Wilkes and Emelia Sithole-Matarise)
