Credit Agricole net profit rises 13% despite internal woes

Credit Agricole has given itself until the end of next week to decide on a new CEO, the French bank said as it posted a 13% increase in quarterly profit yesterday. Chairman Jean-Marie Sander said that the bank’s nomination committee had not yet reached a decision on a replacement for outgoing Chief Executive Jean-Paul Chifflet, whose mandate finishes in May. Reuters reported last week that the bank was close to naming Philippe Brassac, a banker from its federation of regional mutual banks that own a 56% stake in its listed arm, Credit Agricole. The mutuals are eager to reassert influence over CASA after it racked up heavy losses in recent years on sour investments in Greece and Portugal, and they want to see the whole group reorganised to work more coherently. However, under Chifflet the long-muted reorganisation plans have made little progress, leaving tensions between CASA and the mutuals to boil over. “We have recurring debates, and sometimes we raise our voices, that’s the custom within the Credit Agricole group,” Chifflet told a news conference. “We’re still debating.” Internal tensions did not prevent the bank from showing an improvement in its bottom line, with net profit up 13% to €697mn ($795mn). A 42% fall in risk provisions to €499mn helped offset a 2% fall in revenue to €3.894bn. Analysts had on average expected profit of €604mn on revenue of €4.1bn, according to data compiled by Thomson Reuters I/B/E/S. The bank, which has the biggest retail network in France, saw revenue at its regional retail bank branches fall 2.7% as low interest rates pinched deposit margins. Its retail brand LCL fared better with a 1.2% increase in revenue, while international retail banking and insurance both saw revenue grow over 4%. The bank proposed a 2014 dividend of €0.35, unchanged from the previous year.