Credit Agricole Says Subprime Impact Limited


Credit Agricole reported a 0.6% rise in second-quarter net profit on Thursday, which beat an average forecast, and said the U.S. subprime mortgage crisis has had a limited impact on it.

Net profit at France's biggest retail bank rose to 1.292 billion euros ($1.76 billion), with earnings boosted by growth at its overseas operations.

Twenty analysts polled by Reuters gave an average net profit forecast of 1.106 billion euros.

Credit Agricole's profit rise comes after BNP Paribas, France's largest-listed bank, posted a 20% increase in second-quarter net profit while rival Societe Generale saw its net profit rise 33%.

Credit Agricole's results come amid uncertainty over credit market conditions following losses in the U.S. subprime mortgage sector that have caused banking shares to slump worldwide over the last month.

Credit Agricole Second-Quarter Profit Up

Sub-prime lenders offer loans to consumers with a poor credit history. In recent months, the number of loan defaults has increased, raising concerns that losses in the housing market will affect other parts of the economy.

"The U.S. subprime loan crisis has had a limited impact on Credit Agricole," the bank said.

It said its asset management business and its Calyon investment banking arm did not directly hold any U.S. subprime loans.

Credit Agricole said Calyon had not initiated any new financial structuring transactions since the start of problems in the U.S. mortgage market in February.

The bank said Calyon's asset backed securities' (ABS) portfolio had 586 million euros worth of subprime loans and that it had a net exposure of 91 million euros from mezzanine collateralized debt obligations (CDO) tranches.