Slog warnings fulfilled as anaylsts’ estimates trashed
Following three days of confident predictions by The Slog that Credit Agricole SA, France’s third-largest bank by market value, is in trouble based on Greco-Spanish exposure and subsidiary ownership, the bank announced this morning (Friday) that first-quarter profit dropped 75%.
This was twice the level of fall expected by an average sample of analysts earlier in the week. Net income fell to €252 million (from 1 billion a year ago) . The average analyst’s estimate was €482.
Almost a billion euros of write-off relate to Emporiki Bank of Greece SA, the Athens-based unit it acquired in 2006, and Greek bond writedowns resulting from the nation’s sovereign debt restructuring.
“Credit Agricole keeps suffering because of Greece,” Valerie Cazaban, who helps manage 80 million euros at Stratege Finance in Paris and has shares in the bank, said in an interview before the earnings were released. In Greece, the French bank “can’t lock out its positions, it is extremely difficult.”
Credit Agricole shares have fallen 20% this year in Paris trading.
Hang on tight: this is just the start.