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Crédit Agricole announces earnings jump while rival’s profits plummet

Credit Agricole Bank from company website
Credit Agricole Bank from company website Copyright Credit Agricole bank
Copyright Credit Agricole bank
By Eleanor Butler
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France’s second largest bank surpasses profit expectations while competitor Société Générale sees earnings dip.

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Credit Agricole (CA) announced a 55% year-on-year increase in first-quarter net profits on Friday.

Earnings came in at €1.9 billion, outperforming the €1.48 billion average predicted by analysts.

In the previous quarter, CA's sales climbed 11% to €6.81 billion, also beating analysts' expectation of €6.47 billion.

The cost of risk, meaning capital set aside to cover potential losses from loans, was €400 million, €105 million less than expected.

The lender said it now plans to meet its 2025 financial targets a year early, boosted by strong performances in its corporate and investment banking divisions.

This would include hitting an underlying net income target of more than €6 billion.

CA also aims to make a return on tangible equity - meaning its physical capital - of more than 12%.

Higher interest rates have allowed European banks to charge greater fees on loans, boosting profits.

However, not all lenders have fared as well as CA.

France's third-biggest bank, Société Générale, announced on Friday a 22% year-on-year slide in first quarter net profit, which came in at €680 million.

This beat analysts' estimate of €463 million, but is still unlikely to cheer investors.

Revenues in the quarter also surpassed forecasts but were down 0.4% year-on-year.

Under the leadership of CEO Slawomir Krupa, who took over nearly a year ago, the bank has embarked on a major cost-cutting programme.

SocGen announced that first quarter operating expenses came to €4.98 billion, down 1.5% compared to the same period last year.

A ray of hope for the lender lay in its equities trading division.

It recorded revenues of €870 million for the first three months of the year, up 3.1% year-on-year.

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