Crédit Agricole rules out major purchases after sub-prime losses
Thursday 06 March 2008
Crédit Agricole has ruled itself out of "significant acquisitions" after the credit crunch sent it slumping to its first quarterly loss since listing in 2001. The French bank did not close the door completely on a move for Société Générale, however, saying it would "not remain indifferent" should the beleaguered group be approached by a rival.
Crédit Agricole spiralled to a loss of €857m (£657m) in the fourth quarter of 2007, reversing a €1.1bn profit posted in the corresponding period a year ago.
The group said its results "were severely affected by the crisis in the structured credit markets", while its investment banking business, Calyon, was hit with exceptional €3.3bn impairment charges relating to its capital market activities.
René Carron, chairman of Crédit Agricole, said: "With its sound capital base, the group will make organic growth its priority, and it is not considering any significant new acquisitions."
Despite the writedowns, Crédit Agricole's shares rose over 5 per cent, to €18.09. A spokeswoman for the group said: "The underlying performance of the business has been strong. The group has been transparent, responded to the Basel II regulations and the announcement about scaling back acquisitions helped."
Its position over deals would alter should a rival attempt to buy SocGen. Bertrand Badré, Crédit Agricole's chief financial officer, said yesterday "concerning our domestic market and our position as a leader in this market, we cannot remain indifferent to the changes which might occur".
Crédit Agricole is understood to have considered a potential approach for certain SocGen businesses earlier this year. A source close to the group said it had never looked at an offer for the whole group, and should it come to the table in the future, the deal would only be for part of SocGen's operations. "The results might not even be considered a significant acquisition," the source added.
SocGen became a takeover target after trading losses worth €4.9bn were revealed in January, prompting the bank to launch an emergency rights issue. Crédit Agricole was one of several suitors understood to be interested in a deal, with BNP Paribas backed as the favourite by several analysts.
Crédit Agricole said yesterday it had also moved to shore up its risk management and control systems. The group started reinforcing controls after it uncovered unauthorised trading losses in New York in September.
- 1 Bill Clinton portrait features Monica Lewinsky reference, artist admits
- 2 What happens to your body when you give up sugar?
- 3 Delhi bus rapist blames dead victim for attack because 'girls are responsible for rape'
- 4 Have sex with your iPad thanks to the new sex toy no-one asked for
- 5 Average penis size revealed: Scientists attempt to find what is 'normal' to reassure concerned men
Bill Clinton portrait features Monica Lewinsky reference, artist admits
Japanese island overrun with cats after population explodes
China's 'Inconvenient Truth': video exposing country’s smog crisis watched 100 million times
Delhi bus rapist blames dead victim for attack because 'girls are responsible for rape'
The 'sex selfie stick' lets you FaceTime the inside of a vagina
New theory could prove how life began and disprove God
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
This is what it's like to be dead, according to a guy who died for a bit
Ukip would cut billions from Scottish budget to fund English tax cuts
Durham Free School: 'Creationism taught at' free school facing closure
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
iJobs Money & Business
£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...
£50000 - £60000 per annum + Excellent Salary: Austen Lloyd: An outstanding new...
£20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...