Rising bad debts and the weak European economy continue to hit the earnings of some of the region’s top banks.
Loss-making Belgian banking and insurance group KBC has had to ask for government guarantees after a 4.1 billion euro writedown on its investment portfolio. Shares in the French investment bank Natixis slumped after it reported a first-quarter net loss this week with earnings hit by more asset writedowns. It is majority owned by mutual banks Caisse d’Epargne and Banque Populaire who are merging with each other. KBC lost 3.6 billion euros in the first quarter and Natixis 1.8 billion. On the plus side, Fortis managed a 44 million euro profit while Credit Agricole’s profit fell to 202 million, that is nearly half what analysts had predicted. Fortis’ net profit came despite a negative impact on its investment portfolio and the bank – which was carved up by the Netherlands, Belgium and France’s BNP Paribas after it fell victim to the financial crisis – was upbeat about the second quarter France’s biggest high-street bank, Credit Agricole, saw its first-quarter profit fall over seventy percent because it put aside more money to cover bad debts.