Credit Agricole beats profit target

Credit Agricole SA beat its 2022 profit target a year early. Because lower costs for troubled loans and rising revenues across business lines boosted fourth-quarter results beyond consensus. The lender said that it would present a new strategic plan for 2025 on June 22. This is after underlying net income came in at about 5.4 billion euros for 2021.

Other key 2022 targets, such as a cost-to-income ratio below 60% and a return on tangible equity of more than 11% were met. The group said that it would propose a 2021 dividend of 1.05 euro per share. This includes a 20 cents catch-up for the 2019 dividend which could not be paid. The European Central Bank restricted dividend payments in the midst of the crisis to beef up lenders’ balance sheets. After the restrictions were lifted, Credit Agricole intends to add a 20 cent payment to its 2022 dividend. Credit Agricole’s CFO Jerome Grivet explained that any change would be divulged during the presentation of the new strategic plan in June.

Rebounding economic growth and rising interest rates have prompted other European banks to raise shareholder returns. Shares in Credit Agricole touched a session high of 14 euros. Fourth-quarter profit jumped to 1.428 billion euros from 124 million euros a year earlier. French and international retail banking, asset servicing, investment banking, insurances and asset management all saw double-digit increases in net income in the last three months of 2021.

Overall, revenue rose to 5.8 billion euros. Low customer demand was blamed for lower revenue in capital markets. This fell 8% due notably to an 11.8% drop for fixed income, currencies and commodities. Credit Agricole’s listed asset management unit Amundi reported a strong rise in earnings helped by its retail business and expansion in Asia.