French bank Credit Agricole has posted its biggest ever quarterly net loss of 3.07 billion euros.
The worse than expected performance was partly due to losses on sales of assets and on money that had been loaned to the Greek government.
The semi-cooperative bank is in the process of shrinking its balance sheet.
Credit Agricole’s chief executive Jean-Paul Chifflet predicted a “tense” 2012 but said there are signs of improvement in business so far this year: “The months of January and February, in everything that is (capital) markets, have been good.”
Although Credit Agricole is less dependent on investment banking than other big European rivals, it has been burned by its purchase of local Greek bank Emporiki and the cost of closing down risky activities after the 2008 financial crisis.
“We hope we’re reaching the end of the tunnel (on Greek debt write-downs)… But we’re only in mid-February, I’m not sure on the outlook for the Greek economy,” CEO Chifflet said.
The bank is under new management and is trying to return to its low-risk retail lending origins.
Chifflet said its traders’ bonuses would be cut by 20 percent. Though larger rivals BNP Paribas and Societe Generale have pledged cuts of 50 percent, Credit Agricole says it pays its traders less already.
Also on Thursday, smaller domestic rival Natixis reported a milder-than-forecast 32 percent decline in quarterly profits as it became the latest lender to grapple with weak markets and the euro zone crisis.
Last week BNP Paribas, the largest, reported better-than-forecast quarterly profits, while Societe Generale forecast a grim 2012 after a loss at its investment bank.