Credit Agricole reports profit plunge on BES bank collapse

PARIS - French bank Credit Agricole SA reported on Tuesday that net profit plunged to 17 million euros in the second quarter from 696 million euros a year ago, hit by the collapse of Portuguese bank BES.

The group said it had been deceived by the family behind the Banco Espirito Santo (BES) group of companies, and would back any legal action by a new management team at the Portuguese bank. Portugal narrowly averted a national disaster and a fresh eurozone crisis on Monday by launching a new bank as part of a rescue for BES. This crisis rescue, totalling nearly 5.0 billion euros ($6.6 billion), is being overseen by the Portuguese central bank.

The French Agricole bank deemed its 14.6-per cent share in BES to be worthless, and the total cost of the BES disaster to be 708 million euros.Of this, 502 million euros reflected the impact of the losses at BES and 206 million euros the impact of the asset write-down. Credit Agricole SA (CASA) is the holding company of the Credit Agricole bank, a leading European bank grouping regional banks in France. This entity reported that its net profit fell by 49.0 per cent to 705 million euros.

Excluding exceptional items, principally the impact of the collapse of BES, Credit Agricole would have made a net profit of 1.69 billion euros, and its stock-market quoted parent CASA a profit of 1.0 billion euros. The chief executive at CASA, Jean-Paul Chifflet told a telephone press conference: "Of course we support the action by the Bank of Portugal (central bank).

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