Geoff Cutmore - Morning Thoughts

Credit Agricole: When No Means Maybe

Geoff Cutmore

Worse results than expected Wednesday morning from Credit Agricole, but that didn't deter buyers. Within hours of getting the news investors were happy to bid the stock up.

Admittedly, the financials were broadly firmer on the Ambac reports, but that doesn't tell the whole story. The stock has fallen more than 30 percent this year and lately the market has wrestled with concerns about a bid for parts of Socgen.

Analysts have kicked around speculation of a "French banking solution" for weeks. Broadly they haven't liked the idea of a BNP and Agricole carve up at a time when capital preservation is the dominant strategy.

Investors were cheered to hear the company talk down the likelihood of any major acquisitions. Organic growth is the operative phrase. Did that rule out SocGen units?

Er, not quite. This is France remember, where even yogurt is considered a strategic matter.

In subsequent conversation with our reporter the message appeared to have been finessed. No major acquisitions, but we reserve the right to have a look at any move on SocGen from another party.

So can investors take the no acquisition story to the bank? Well, yes. Or perhaps that should be maybe. This is a French bank after all.

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