Credit Agricole Hit by 3.8 Billion Euros in Charges
French bank Credit Agricole warned on Friday that its fourth quarter results would be battered by 3.8 billion euros ($5.16 billion) in charges as the French bank reels from ill-timed acquisitions from before the 2008 financial crisis.
They included 923 million euros related to consumer finance and 852 million for Italian retail banking, as well as a 267 million writedown on its 20 percent stake in Portuguese lender Banco Espirito Santo.
France's No. 3 bank said in a statement that 2.676 billion euros in goodwill writedowns reflected tighter regulatory requirements as well as "the present macro-economic and financial environment in the relevant countries and business lines".
The writedowns, which come at the end of a year in which Credit Agricole has been hammered by its exposure to Greece and Italy, come on top of billions in euros of additional charges taken earlier this year and last.
The goodwill charges will have no impact on solvency or liquidity ratios, the bank said, although a series of other accounting writedowns could have a marginal impact on regulatory ratios.
Those include an 850 million euro hit from the revaluation of its own debt on the lender's quarterly revenues, which translates into a roughly 550 million euro impact on net profit.
Last month the European Union's markets watchdog said it had told companies and their accountants they would be named publicly if they failed to properly write down goodwill impairments in their latest results.