Credit Agricole on Thursday reported a sharp rise in its core capital ratio to 12.4 percent after making use of higher profits and proceeds from sale of a stake in investment company Eurazeo to bolster its finances. The French bank, majority-owned by a network of co-operative regional lenders, has over the past year simplified a complex shareholding structure to ease investor concerns about its ability to build capital buffers to maintain dividend payments.
Improving economic activity in core European markets including France and Italy, coupled with a slight increase in interest rates and cost cuts, helped to drive the bank's second-quarter net income up 17 percent to 1.35 billion euros ($1.60 billion). Revenues fell 0.6 percent, as its asset manager Amundi and insurance business suffered quarterly outflows.
Credit Agricole's shares are up 24 percent year to date, versus a 9 percent rise for the European banking sector. Credit Agricole was the last major French bank to report second-quarter results. Natixis reported an increase in profits, while BNP Paribas and SocGen posted lower second-quarter profits.
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