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 Migrant crisis: Greek soldier saved 20 people singlehandedly off Rhodes beach
- 2 Sofyen Belamouadden murder: The inside story of a crime that horrified Britain
- 3 UK weather: Britain braced for snow as arctic air mass moves in
- 4 Aaron and Melissa Klein: Oregon anti-gay bakers ordered to pay $135,000 after refusing to make cake for same-sex wedding
- 5 'Isis' schoolgirls: Missing British teenager tweets picture of her Syrian takeaway
Migrant crisis: Greek soldier saved 20 people singlehandedly off Rhodes beach
Ian Brady: Moors murderer announces his support for Ukip and the SNP
Aaron and Melissa Klein: Oregon anti-gay bakers ordered to pay $135,000 after refusing to make cake for same-sex wedding
UK weather: Britain braced for snow as arctic air mass moves in
Power of Nepal earthquake was equivalent to 20 huge atomic bombs
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband
The sickening truth about food banks that the Tories don't want you to know
Migrant boat disaster: Ukip candidate mocks victims in sickening Twitter post
Nigel Farage wants the BBC to stop making programmes like Doctor Who, Strictly Come Dancing, and Top Gear
Global warming: Scientists say temperatures could rise by 6C by 2100 and call for action ahead of UN meeting in Paris
General Election 2015: Britain would become a 'communist dictatorship' under Ed Miliband and Nicola Sturgeon, claims wife of Michael Gove
iJobs Money & Business
£20000 - £60000 per annum: Recruitment Genius: Are you recently QCA Level 4 qu...
£20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...
£25 - 30k: Guru Careers: We are seeking an Application Support Analyst / 1st L...
£45K - £55K (DOE) + Benefits: Guru Careers: We are seeking a full stack .NET D...