French Bank Confident Despite Market 'Irrationality'
CNBC EMEA Head of News
The boss of Credit Agricole, France’s number three bank, is confident despite what he describes huge “market irrationality.”
There "a lot of volatility, a lot of nervousness, a lot of irrationality linked to perceptions of catastrophic situations" said Jean-Paul Chifflet, the CEO of Credit Agricole, on a conference call with analysts following the release of second-quarter earnings.
Following a sharp fall in US money market funding, Europe’s top banks have seen their shares come under heavy selling. But Chifflet is confident Agricole has enough cash, saying alternative sources of funding can be found in Asia and the Middle East.
The comments came as Credit Agricole posted forecasts beating profits which pleased investors and sent the stock sharply higher at the European open.
Net profits at the French bank for the second quarter came in at 339 million euros ($488 million).
Analysts polled by Reuters had predicted that second quarter profits would fall by 49 percent to 193 million euros.
In July Agricole warned that problems at its Greek division, Emporiki Bank, would lead to its second quarter results taking an 850 million euros hit.
That loss came in at just 640 million euros, less than expected.
Management are standing by their long-term earnings targets.
The news could help the bank's share price rise when markets open Thursday as some analysts had been expecting Agricole to cuts its 2011 and 2012 targets due to the problems in Greece.
Investors had been spooked by a sell-off in the bank's stock earlier this month, along with other French banks, including Societe Generale.
Credit Agricole shares have fallen by over 40 percent since June as fears over the impact of the euro zone debt crisis weighed on the entire banking sector.
Agricole has partly or fully owned businesses in Greece, Italy, Spain, Portugal and Belgium.