Credit Agricole restructured its complex business during the third quarter, enabling it to set a minimum dividend level for payment next year and improve its closely-watched regulatory capital buffers.
The French bank soundly beat net income estimates for the quarter, delivering 1.86 billion euros ($2.1 billion) against the 1.70 billion euros consensus recorded in a Reuters poll.
According to analysts at investment bank Jefferies, in a note published Tuesday morning: "The beat comes from across the board with a record quarter in large corporates and solid cost control across retail."
Having simplified its cross-shareholding ownership structure between its listed entity and co-operative parent banks, Credit Agricole said it now intends to recommend in May 2017 a dividend of 0.60 euros per share in relation to its 2016 results, equating to a 50 percent payout ratio. The lender says it does not expect to lower its 2017 dividend versus this year.
The simplification strategy ensured a strengthening of the bank's capital base with its common equity tier 1 ratio - a key indicator of a bank's ability to absorb losses – edging up to 12 percent from 11.2 percent at mid-year.
Execution of the plan led to a 1.25 billion euros gain which is included in this quarter's results.
Revenues delivered a less-welcome result with the 3.74 billion euros recorded missing expectations and slipping from 3.92 billion euros in the third quarter of 2015.
Similarly to what has been seen in the results of several peers during this period, Credit Agricole's fixed income trading performed strongly, boosting its corporate and investment bank figures.
However, weakness was seen in several other divisions as revenues earned in French retail, international banking, insurance and wealth management dropped versus year-ago comparable numbers.
Regarding the bank's asset-gathering capabilities in its Amundi asset management business during the quarter, Jefferies noted, "Revenues up 5.1 percent year-on-year with strong Q3 inflows of 8.9 percent annualised stemming particularly from institutional as well as a solid quarter in retail inflows."
Speaking on CNBC's Squawk Box, Deputy chief executive Xavier Musca said he believed the company was in a very strong position and that it was wrong to assume all banks in Europe suffered from extreme vulnerability.
Musca highlighted Credit Agricole's regulatory capital requirements clearly surpassed the European Central Bank's (ECB) targets and had only strengthened during the last quarter.
While acknowledging that various banks in the region were weakened by high levels of non-performing loans or very severe profitability challenges, he cautioned against too stringent measures being directed against the entire sector.
"Having too much of an obsession with capital is something which could be detrimental for both the profitability of the banks in Europe - which is by this time a bit weak - and also because it won't be favorable to growth which is obviously something we all struggle for," he told CNBC.
Musca also addressed bank's ongoing attempts to reduce costs and enact other measures in order to offset the persistent headwinds from low interest rates.
"The dynamic of interest rates is a real challenge for us. The whole policy we are following is to adapt to this new environment, precisely not to make us too much sensitive to the evolution of interest rates, by developing services, by selling in our networks all the products which are generating fees," he explained.