Credit Agricole’s Q2 results exceeded expectations, driven by strong performance in insurance and consumer finance.

Credit Agricole's Q2 results exceeded expectations, driven by strong performance in insurance and consumer finance.

Credit Agricole Posts Better-Than-Expected Quarterly Earnings, Acquires Majority Stake in Degroof Petercam

PARIS, Aug 4 – In a surprising turn of events, Credit Agricole SA (CAGR.PA), France’s second-biggest listed bank, reported better-than-expected quarterly earnings on Friday. The bank’s strong performance in its insurance and consumer finance divisions drove its success.

Record-Breaking Results

Credit Agricole’s second-quarter net income group share saw an impressive 25% increase from the previous year, reaching 2.04 billion euros. This figure far surpassed the 1.39 billion-euro average estimated by analysts. Additionally, quarterly sales rose by 19% to 6.68 billion euros, beating the consensus of 5.9 billion euros for the three-month period ending in June.

These record-breaking results were attributed to the exceptional performance of the insurance business and the special financial services (SFS) unit. The SFS unit encompasses the lender’s consumer finance activities, which experienced a boost in sales due to a joint venture with carmaker Stellantis dedicated to car leasing.

Expanding the Scope of Indosuez Wealth Management

In addition to their outstanding financial results, Credit Agricole also announced their intention to acquire a majority stake in Belgian wealth manager Degroof Petercam. This strategic move will increase the scope of Credit Agricole’s Indosuez Wealth Management division by approximately 50%.

Xavier Musca, the head of Credit Agricole’s investment bank, expressed the bank’s goal of owning 80% of Degroof Petercam following the acquisition of various family-held stakes. Flemish family Cigrang, who currently holds a stake, would retain 20%. Musca noted that Degroof Petercam manages around 35 billion euros and has approximately 30,000 clients.

• China lifts tariffs on Australian barley as trade ties improve.
• Markets drift ahead of payrolls test
• Zhengzhou city in China implements property support measures.

Addressing Risks

While Credit Agricole achieved remarkable financial success, it did face challenges in terms of its risk profile. The cost of risk, which is the amount set aside for failing loans, more than doubled to 534 million euros. This increase was due to “a market significant case” as well as higher risks associated with retail banking and consumer credit. Despite this, the bank’s performance remained strong and resilient.

Future Investments

In a separate development, Credit Agricole revealed that SAS Rue La Boetie, the investment vehicle of Credit Agricole Group’s 39 mutual banks, plans to invest an additional 1 billion euros in the listed entity. This move would increase its stake from the current 60.2% to further consolidate their position within the company.

Conclusion

Credit Agricole’s better-than-expected financial results showcase the bank’s resilience and adaptability in the face of economic challenges. Their strong performance in insurance and consumer finance, as well as their strategic acquisition of a majority stake in Degroof Petercam, position them for future growth and expansion.

• AUT
• AUTO
• AUTOMV
• BACT
• BE
• BISV
• BISV08
• BIZ
• BLUX
• BNK
• BNKCOM
• BNKS
• BSVC
• CARM
• CMPNY
• CYCS
• CYCS08
• EUROP
• EZC
• FIN
• FINS
• FINS08
• FR
• INSR
• INVBIS
• INVS08
• NL
• PUBL
• RATI:FINANCIAL-RESULTS
• RES
• TOPCMB
• TOPNWS
• WEU