French banks are experiencing a strong earnings season, highlighted by Crédit Agricole SA’s quarterly results that exceeded market expectations. The bank reported a 26.6% increase in net income for the fourth quarter, reaching 1.689 billion euros, and a record annual net income of 7.09 billion euros. A 5% dividend increase has been proposed, while La SAS Rue La Boétie plans to acquire additional shares. The robust performance is attributed to financing, investment banking, and insurance sectors.
Strong Earnings Performance for French Banks
The earnings season is kicking off on a positive note for French banking institutions. Following BNP Paribas’ impressive announcement yesterday, Crédit Agricole SA has also reported quarterly results that have surpassed market expectations. Investors are responding favorably, driving the stock of the green bank up by 1.86%, reaching 14.825 euros. The banking group has reaped the benefits from its robust financing and investment banking sectors, along with its insurance and asset management divisions. Notably, Amundi released its results earlier this week, which also exceeded analysts’ forecasts.
Exceptional Quarterly Results
In the fourth quarter, Crédit Agricole SA recorded a remarkable 26.6% increase in net income, totaling 1.689 billion euros, significantly above the consensus estimate of 1.32 billion euros. The net banking income saw a 17.4% rise to 7.09 billion euros, well above the anticipated 6.53 billion euros.
For the full fiscal year, Crédit Agricole SA achieved a record group net income of 7.09 billion euros, surpassing its own target of over 6 billion euros set for 2026. Philippe Brassac, the CEO of Crédit Agricole SA, stated, “Crédit Agricole S.A. has once again exceeded all financial targets ahead of schedule as outlined in its strategic plan.” He is set to be succeeded by Olivier Gavalda after the general meeting on May 14, 2025, although the bank did not announce any new targets at this time.
UBS attributes these impressive results to the solid performance in financing and investment banking, as well as gains in insurance and asset management. The net banking income from the financing and investment bank, known as BFI, surged by 7.7% in the fourth quarter, reaching an all-time high of 1.57 billion euros. Meanwhile, net banking income from the insurance sector jumped by 37.1% to 715 million euros, benefiting from a favorable comparative base. Amundi also reported an adjusted net income of 377 million euros, reflecting a 20% increase in the fourth quarter.
In the realm of retail banking in France (LCL), net banking income remained stable at 960 million euros, bolstered by commissions.
Dividend Increase and Future Plans
Crédit Agricole SA has proposed a 5% increase in its dividend compared to 2023, raising it to 1.10 euros. The institution concluded the year with a hard capital ratio of 11.7%, while its return on tangible equity climbed by 1.4 percentage points to 14%, exceeding its target of at least 12% by 2025.
In conjunction with this announcement, La SAS Rue La Boétie, which holds 62.7% of Crédit Agricole SA, expressed its intention to acquire up to five hundred million euros in Crédit Agricole SA shares by the end of the third quarter of 2025. They clarified that they do not plan to increase their stake beyond 65%, indicating that this move is heritage-oriented.
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