PARIS (Agefi-Dow Jones) – Crédit Agricole SA (CASA) on Thursday announced a share of the group’s main net profit for the first quarter of 2022 of 756 million euros, down 18.9% due to the war in Ukraine. This result takes into account the reserve of 389 million euros associated with its risk in Russia.
The reported net profit reached 552 million euros, which is 42.7% less, taking into account the reserve for the total cost of equity of CA Ukraine in the amount of 195 million euros. Therefore, the difference between the published and the baseline result is mainly related to this depreciation related to Ukraine.
“As for the financial level, the group has chosen a cautious provision in the face of very low proven risks,” said Philippe Brassac, general manager of Credit Agricole SA, during a press conference. Of the 389 million created for Russia, 346 million correspond to prudential reserves and 43 million to proven risks.
The cost of CASA risk in the first quarter was 546 million euros, which is 42.2% more than in the first quarter of 2021. The base value of the risk is 47 basis points for annual debt and 31 basis points for the four current quarters.
The group’s basic net banking income (NBI) reached 5.93 billion euros, which is 7.6% more than in the first quarter of 2021.
In addition to the consequences of the war in Ukraine, the group said in a press release that it demonstrated “dynamic commercial activity in the first quarter” given the “macroeconomic impact of the conflict ahead”.
“All companies have contributed to the growth due to the dynamism of the quarter,” the group explained. Revenue from the Savings Management and Insurance Division grew 9.2%, integrating a scale effect related to the takeover of Lyxor Index Fund specialist, acquired last year by Amundi’s asset manager, a subsidiary of CASA.
Revenues from large customers increased by 4.4%, revenues from specialized financial services increased by 6.8%, and revenues from retail banking services increased by 10.5% compared to the first quarter of 2021.
According to the consensus reached by FactSet, analysts expected an average net profit of 588 million euros and GNP of 5.62 billion euros.
Basic operating expenses – excluding contributions to the Single Recovery Fund (SRF) – increased by 9.6% to € 3.5 billion from € 3.2 billion a year earlier. The group’s contribution to SRF, for its part, amounted to 636 million euros, which is 24.7% more than in the same quarter of 2021.
The group explains the increase in costs mainly due to changes in volume resulting from the integration of Lyxor and the Italian institution Credito Valtellinese (Creval).
“If we analyze the evolution of costs without taking into account the FRU and the impact of the perimeters associated with Lyxor and Creval, the growth (costs) is only 5.4%,” said Jerome Grive, CEO. Deputy Crédit Agricole SA, responsible for finance. The head clarified that these costs correspond to the investment “for the development of activities.”
The cost / benefit ratio deteriorated to 59% from 57.8% in 2021. “We are at an extremely low level and below our goal,” Jerome Grive commented. In its strategic plan, the group strives for a cost-benefit ratio of 60%.
“Open” process for BPM verification
Regarding his proposal to take over Banco BPM’s insurance business in Italy, “we believe we have a chance, but it is, of course, an open process,” said Xavier Musca, Deputy Chief Executive Officer of Crédit Agricole SA. . Moreover, according to him, “the order of what could be a partnership is still difficult to formulate. The conditions under which this partnership can be concluded are still being discussed.” But even if CASA took over all this activity, “the impact on CET1 Casa would be relatively modest,” he continued.
At the end of the first quarter, the capital ratio of Casa CET1 was 11%, which is 0.9 percentage points less than in the previous quarter, when it was 11.9%. Its basic rate of return on tangible capital (RoTE) was 11.6% at the end of the first quarter of 2022.
On June 22, the group will present its future medium- and long-term plan.
-Franc Joselin, L’Agefi. ed .: ECH
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5:03 PM Eastern Time on May 5, 2022 (05:03 GMT)