Crédit Agricole to Unveil New Chief Executive Next Week
Bank’s fourth-quarter profit rises 13% from a year earlier
Crédit Agricole SA on Wednesday said it would announce the name of its new chief executive next week, as the French bank seeks to return to its roots and reorganize around its regional retail lenders.
The new chief executive will take over from Jean-Paul Chifflet, whose five-year term comes to an end this month. The lender is struggling to reorganize its complex structure amid rising tension within the company. The new chief executive will need to reconcile Crédit Agricole’s bankers with regional lenders, who feel that the group has moved too far away from its traditional market by sinking billions of euros into subprime losses and ill-fated acquisitions in southern Europe.
“There’s a permanent debate, sometimes we talk loudly, but that’s how it’s been for years,” Mr. Chifflet said, speaking at a news conference in Paris. He added that the bank would announce its decision as soon as an agreement is reached.
The group’s regional retail banks own a 56% stake in Crédit Agricole SA, the listed entity, which in turn owns 25% of these lenders—a structure, analysts say, is too complex.
Philippe Brassac, who currently heads one of the 39 regional retail banks, is a potential candidate for the chief executive position, according to people familiar with the matter. The bank declined to comment.
Crédit Agricole, which once had big ambitions in southern Europe, was able to close a difficult chapter with the sale of its Greek lender, Emporiki, and by writing off the entire value of its stake in troubled Portuguese lender Banco Espírito Santo last year.
News on the CEO came as France’s second-largest listed bank by assets, said fourth-quarter profit rose 13% to €697 million ($795.95 million), aided by falling costs and lower provisions against bad loans.
Shares in the Crédit Agricole gained around 6% in late morning trade in Paris.
In France, retail banking net profit rose 7.3% to €201 million, despite a stagnating economy and low interest rates.
But, like French rival bank BNP Paribas SA, Crédit Agricole could continue to suffer from its exposure to Italy. Cariparma, Crédit Agricole’s Italian lender, set aside provisions against bad loans of €141 million, up 9% from a year earlier, as the country struggles with a weak economy and rampant unemployment.
Total revenue fell 2% to €3.89 billion in the fourth quarter.
Crédit Agricole’s core tier-one ratio, which compares top-quality capital such as equity and retained earnings with risk-weighted assets, stood at 10.4% on Jan. 14, up from 10.1% in September.
The bank’s board will propose a dividend of €0.35 a share.
Earlier this month, BNP Paribas said fourth-quarter net profit jumped to €1.3 billion, as it recovered from a record U.S. fine for sanctions violations last year, while Société Générale SA’s net profit more than doubled to €511 million.
Source: WSJ – Crédit Agricole to Unveil New Chief Executive Next Week
