France’s third bank for assets Credit Agricole (CA) has seen its profits nearly halved after it wrote off the value of its stake in Portuguese Banco Espirito Santo (BES).
The Paris-based lender has reported net profit of €17m in Q2 of 2014, compared with a €698m net profit in the same period last year. Revenue also fell by 6% to €3.93bn in the period between March and June.
The negative performance, consisting of total €708m loss, was due to Credit Agricole’s 14.6% stake in BES, which CA helped set up Banco Internacional de Credito back in 1986. More in detail, the French lender lost €502m in BES and depreciated its stake in the Portuguese bank by €206m.
BES crisis, which ended recently with the announcement of a rescue plan by the Bank of Portugal, has also hit a number of Spanish players, according to the local press. Eleven Spanish asset managers reported losses in some of their Sicavs and funds following the announcement of the plan, including Banco Madrid Gestión de Activos; Popular Gestión Privada; Inversis Gestión; Bankinter Gestión de Activos; March Gestión de Fondos; Espírito Santo Gestión, as well as UBS Gestión; Credit Suisse Gestión; DWS Investments; Alpha Plus Gestora and Renta 4 Gestora.
“We can only regret having been misled by the family with which Credit Agricole was trying to create a true partnership to build the biggest private bank in Portugal,” Credit Agricole CEO Jean-Paul Chifflet said during a press conference.
The news follows that of BNP Paribas record net loss of €4.32bn after agreeing to pay a nearly $9bn fine and pleading guilty to violating US sanctions against Sudan, Iran and other countries. However, good news came from Societe Generale, whose profit in Q2 2014 was up 7.8% at to €1.03bn.