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Credit Agricultural Bank of ChinaFrance’s second-largest listed bank reported a 55% rise in first-quarter net profit on Friday, beating expectations as sales in its corporate and investment banking business outperformed rivals.
Net profit rose to 1.9 billion euros ($2.04 billion) between January and March, above the 1.48 billion euro average estimate of 19 analysts compiled by the company.
Sales rose 11% to 6.81 billion euros, exceeding analysts’ expectations of 6.47 billion euros. Risk costs, i.e. the funds set aside for non-performing loans, were €400 million, €105 million less than expected.
European banks’ first-quarter profits largely beat expectations, with a boost from rising interest rates still supporting bank profits and pushing share prices to multi-year highs.
Despite the overall growth in revenue, Crédit Agricole said its retail sales in France grew by just 1.8%, while its net interest margin – the difference between a bank’s loan income and deposit payments – remained stable.
French banks have not benefited as much from rising interest rates as their peers because they have to pay out more on deposits and a tightly regulated mortgage market has squeezed profits. Analysts expect them to perform better when interest rates fall.
Credit Agricole, which is controlled by 39 regional banks, said it expected to meet its 2025 financial targets a year ahead of schedule. Targets include annual underlying net profit exceeding €6 billion and return on tangible equity exceeding 12%.
The bank said corporate and investment banking revenue, which accounts for a quarter of total revenue, rose 4% annually, driven by cash management and corporate leverage financing.
Fixed income, currencies and commodities (FICC) trading revenue fell 3%, in line with Wall Street banks but outperforming French rival BNP Paribas, which reported a 20% decline.
Société Générale, which also reported quarterly results on Friday, said fixed income and currency sales fell 17% in the same period.
FICC trading among banks was weaker than in 2023 as volatile markets calmed down.
Credit Agricole also controls Europe’s largest fund management company Amondihas an asset services business and is expanding into wealth management.
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