slight profit taking after solid results

( – The fourth and last major listed French bank to present its fourth quarter accounts, Crédit Agricole SA did better than expected. If, like its competitors, it benefited from dynamic market activities, it also benefited from results that exceeded insurance expectations. On the stock market, Crédit Agricole SA shares lost 0.59% to 13.57 euros, investors having already anticipated this good performance in light of that of BNP Paribas and Société Générale. Crédit Agricole SA still has the best stock market in the French banking sector over a year: 38%.

In the fourth quarter, Crédit Agricole SA recorded a 64.9% jump in its group share of net profit to 1.66 billion euros, allowing it to post profits up 10% in 2019 to 4.84 Billions of Euro’s. Quarterly net banking income increased by 5.5% to 5.12 billion euros while it increased by 2.1% to 20.15 billion euros in 2019.

Crédit Agricole S.A accounts for the past three months were supported by exceptional income of 343 million euros, compared with charges of 59 million euros in the fourth quarter of 2018.

They include this year a positive impact of 1.04 billion euros linked to a favorable decision of the Council of State regarding the deductibility of the charge of 2.3 billion euros, borne by the French bank during the sale of Emporiki in 2012. This impact more than compensated for impairments, including that of LCL’s goodwill of € 611 million.

In adjusted data, the group share of net profit increased by 23.5% to 1.32 billion euros in the fourth quarter for revenues increasing by 7.7% to 5.18 billion. Crédit Agricole S.A.’s profits benefited from a scissor effect, with management fees increasing by only 2.2%. The bank thus posted an operating coefficient down 3.4 points to 60.6%.

Analysts point to the good performance of corporate and investment banking, but also of insurance.

Quarterly revenues from FICC brokerage (rates, credit, foreign exchange and commodities) and from investment banking jumped 54.7% to 573 million euros. Crédit Agricole S.A achieved in particular a solid performance on credit, rates and foreign exchange.

Insurance activities, for their part, recorded a 4.2% increase in net profit, group share, to 385 million euros, exceeding consensus by 7%.

The bank ended the year with a hard capital ratio of 12.1%, up 40 basis points over the quarter. This level of solvency will allow it to dismantle 35% of the Switch in the first quarter, a complex risk transfer mechanism within the group implemented in 2014. This simplification of the group structure had been announced in January.

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