PARIS (Reuters) - Credit Agricole SA, France's biggest retail bank, posted a fourth-quarter loss on Wednesday after large writedowns due to the global credit crunch and said it was not planning any major acquisitions.
By Sudip Kar-Gupta
PARIS (Reuters) - Credit Agricole SA, France's biggest retail bank, posted a fourth-quarter loss on Wednesday after large writedowns due to the global credit crunch and said it was not planning any major acquisitions.
Agricole, which analysts have speculated might be interested in weakened French rival Societe Generale, made a bigger-than-expected net loss of 857 million euros ($1.30 billion), with earnings hit by a 3.3 billion euro writedown at its Calyon investment bank.
A year earlier, it had made a net profit of just over 1 billion euros. The loss was bigger than the average forecast of 627 million euros from a Reuters poll of 18 analysts.
!ADVERTISEMENT!"We have built a solid model. With its sound capital base, the group will make organic growth its priority and it is not considering any significant new acquisitions," Agricole Chairman Rene Carron said in a statement.
Agricole said it could not remain indifferent to the situation at SocGen, however.
"What is clear is that, concerning our domestic market and our position as a leader in this market, we cannot remain indifferent to the changes which might occur," Chief Financial Officer Bertrand Badre told reporters on a conference call.
SocGen has been viewed as a bid target since announcing 4.9 billion euros of trading losses in January, which it has blamed on rogue deals carried out by one trader.
BNP Paribas, France's biggest listed bank, has said it is looking at SocGen and some analysts have speculated that Agricole might be interested in splitting up SocGen along with other banks.
Agricole shares were up 2.3 percent at 17.61 euros in early morning trade, recovering from a 3.4 percent fall the previous day.
Stratege Finance fund manager Jacques Tissier said there was some relief in the market that Agricole was not embarking on a big takeover program, but added he would steer clear of the banking sector while the credit crisis continues.
"The fact that they have said they are not going to get involved in any big acquisition has been well perceived," he said.
WRITEDOWNS
Credit Agricole's writedown of 3.3 billion euros was greater than the 2.5 billion euros it reported in December.
Agricole said this reflected its exposure to problems surrounding monoline insurers -- firms that insure against the risk of a bond or another security defaulting and which have been affected by the credit crunch.
The credit crisis, which stemmed from writedowns on U.S. subprime mortgages, has triggered losses at many of the world's top banks.
In February, SocGen reported a record fourth-quarter net loss of 3.35 billion euros and 2.9 billion euros in writedowns.
BNP Paribas managed to post a fourth-quarter net profit of around 1 billion euros in February, although this was down 42 percent from the previous year.
Credit Agricole is also tussling with businessman Jaime Botin to gain influence over Spanish bank Bankinter. Agricole has the right to raise its stake in Bankinter to 29.9 percent from its current stake of around 20 percent.
CFO Badre said Agricole aimed to have "friendly relations" with Bankinter's management and shareholders but declined further comment on the matter.
Agricole raised its dividend by 4.3 percent to 1.20 euros. The bank said shareholders had the option of getting 80 percent of this paid out in shares.
Based on latest prices, Credit Agricole shares have fallen around 24 percent since the start of 2008, more than a 20 percent decline in the DJ Stoxx European bank sector.
(Editing by Jason Neely and Quentin Bryar)
