Earnings at some of France's major banks could be face a further drag from more writedowns as the problem of rising impairment charges hasn’t gone away, rating agency Fitch said in a statement Wednesday.
"Loan impairment charges escalated during 2009 across all large French banks and Fitch expects these to remain at high levels in 2010," Eric Dupont, senior director at Fitch's Financial Institutions team, explained in the statement.
"The bulk of problems are emerging within international retail loan portfolios, notably within the unsecured consumer lending books, but wholesale and SMEs loan books are also showing signs of mounting impairments," he added.
The statement also added that France's key banks have come through the worst of the credit crisis in "relatively good shape" and government intervention worked efficiently to stave off further weakness.
All the French banks that tapped the state for funds in the wake of the crisis, with the exception of Groupe BPCE, had paid off the government by the end of 2009, Fitch noted.
"In the case of Societe Generale and Groupe BPCE, such assets are still on the high side in relation to Fitch eligible capital," the rating agency said.