Credit Agricole Shares Fall After Greek Unit Hit
Shares in French Bank Credit Agricole fell in early Paris trade on Friday after the group announced it took an 850 million euros ($1.2 billion) hit in the second quarter for an expected loss at its Greek Emporiki Bank unit and its participation in an EU-led rescue plan for Greece.
By 8:35 am GMT, the stock was down 2.5 percent.
Emporiki Bank’s net banking income suffered from a slowdown of its operations as well as an increase in the cost of funding related to the growing competition to attract deposits within the Greek banking system, Credit Agricole said in a statement.
"The participation of Emporiki Bank to the support plan to Greece results in an estimated 71 million euro impairment of its Greek government bond portfolio," the bank said, adding that these elements are expected to lead Emporiki Bank to greater losses than those expected for the second quarter 2011.
The French bank's Greek unit is expected to post a second quarter loss of 444 million euros in the second quarter, and Credit Agricole said it would also book a depreciation for the remaining balance of the goodwill on Emporiki Bank amounting to 359 million euros in the second quarter.
Credit Agricole reports second quarter earnings on August 25.