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French bank Credit Agricole reports flat 2Q net profit

French bank Credit Agricole reports flat 2Q net profit

French bank Credit Agricole SA reported flat second-quarter net profit on Thursday, and said that the U.S. subprime crisis had a "limited impact."
Shares rose after the bank reported a 0.6 percent increase in second-quarter net profit to euro1.29 billion (US$1.76 billion), from euro1.28 billion a year earlier, and above analyst expectations.
Before the announcement, Credit Agricole shares had tumbled more than 15 percent this year due to fears of possible fallout from risky subprime mortgages. The shares rebounded a bit Thursday, up 4 percent to euro27.97 (US$38.13) in early morning trading in Paris.
Foreclosure and late payments have spiked, especially for subprime borrowers with blemished credit histories or low incomes. As liquidity linked to the U.S. mortgages dried up, banks have become more stringent about lending, and central banks have injected cash into the monetary system.
Some foreign banks have been affected by the crisis. France's BNP Paribas spooked markets Aug. 7 by temporarily freezing three funds with exposure to the subprime crisis.
In a statement, Credit Agricole said none of its business lines have direct holdings of U.S. subprime loans, and that the crisis "had a limited impact."
Its asset management business has calculated its exposure at euro100 million (US$136 million), and its corporate and investment bank Calyon has some exposure in its credit derivatives and engineering and distribution businesses.
"Difficulties encountered in these businesses were more than offset by the performance of the other capital market activities desks," the bank said.
Results in July and August, when the turmoil in financial markets took off, are roughly the same as in 2006, Credit Agricole said.


Updated : 2020-12-01 02:10 GMT+08:00