French bank plunges to 125m pounds loss

Click to follow
The Independent Online
CREDIT Lyonnais, France's largest commercial bank, plunged to a loss of Fr1bn ( pounds 125.8m) in 1992 as a result of a jump in provisions for possible loan losses.

The loss, the third in its history and its worst result in 20 years, was a sharp turnaround from 1991 when it made profits of Fr3.16bn

It was also the latest in a string of poor earnings reports by French banks, which have been hit by exposure to the crisis-hit property sector and by mounting bankruptcies at smaller firms.

Jean-Yves Haberer, chairman, said Credit Lyonnais had suffered additionally from poor lending by its Dutch subsidiary.

Credit Lyonnais Netherlands lent heavily to Sasea, a troubled Swiss holding company, and provided finance for Italian financier Giancarlo Parretti's 1990 purchase of MGM, the Hollywood film studio.

Credit Lyonnais, which cut its dividend to Fr15 from Fr23, put aside a total of Fr14.69bn in 1992 for doubtful loans against Fr9.60bn in 1991.

Mr Haberer admitted that the loss, which was at the upper end of the range estimated by analysts, was a blow. He said the bank was facing up to it calmly, although not complacently.