Credit Agricole, France’s second-largest listed bank, reported quarterly results on Wednesday that beat market expectations. The bank’s success is largely due to the strong performance of its retail and investment banking divisions.
Net profit in the third quarter increased 33% year-on-year to 1.75 billion euros ($1.87 billion). The increase exceeded analysts’ average forecast of 1.37 billion euros. The banking group’s revenue also exceeded expectations, totaling 6.34 billion euros, an increase of 19% over the previous year. The bank spent less than expected on failed loans, setting aside 429 million euros, further bolstering its profits.
Crédit Agricole, which is controlled by 39 French mutual banks, reported revenue at its corporate and investment banking unit rose more than 9% in the period. This growth was primarily driven by a 25.6% increase in fixed income, currencies and commodities (FICC) trading.
Compared with French competitors such as Societe Generale, BNP Paribas, Deutsche Bank, and Barclays, Crédit Agricole’s performance is outstanding. Less volatile financial markets have negatively impacted investment banks’ earnings.
French retail banking revenue remained stable, rising slightly by 0.4% in the third quarter. This stability is driven by customer growth, stable net margins, and the benefits of hedging contracts.
In Italy, net profit margin increased by 48%. This increase was due to higher interest rates in France being passed on to customers more quickly. In France, where most mortgages are signed at fixed rates, the government determines remuneration for the country’s most popular savings accounts, putting pressure on banks’ profits.
French bank Credit Agricole, which controls Amundi, Europe’s largest fund management company, recently announced plans to acquire Belgian asset management company Degroof Petercam. The acquisition is part of the bank’s ongoing strategy to expand its wealth management business.
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Based on InvestingPro’s real-time data and expert tips, we’ve got some valuable insights to share about Crédit Agricole.
InvestingPro data shows that Crédit Agricole’s share price is currently down 1.0% from its 52-week high, indicating a strong market performance. Additionally, the bank’s average daily trading volume is $90,000, highlighting the high level of trading activity.
It’s clear from InvestingPro Tips that Credit Agricole, a well-known player in the banking industry, trades at a low price/book multiple. This suggests the bank’s shares may be undervalued, making it a potentially attractive investment opportunity. Additionally, Crédit Agricole pays out a generous dividend to shareholders, which is a positive sign for income-focused investors.
Notably, InvestingPro provides over 13 additional tips for Crédit Agricole, giving you a comprehensive understanding of the bank’s financial health and investment potential.
Reuters contributed to this article.
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