Portuguese scandal hits Credit Agricole Q2 profit
Print Edition
FRENCH bank Credit Agricole said yesterday its second-quarter profit was almost halved by the cost of writing off its stake in the Portuguese bank that needed a bailout this week.
In its earnings report for the period, Credit Agricole Group said it lost 708 million euros (US$948 million) from writing down to zero the value of its 14.6 percent stake in Banco Espirito Santo. The group is the first major foreign shareholder to detail its losses in Portugal’s biggest banking scandal, a case of alleged fraud that blindsided regulators.
Authorities on Sunday put up 4.9 billion euros to bail out the lender and decided to split it in two. A new company, Novo Banco, will take on the healthy parts while Banco Espirito Santo will take on the losses and eventually be liquidated.
The move is part of the Portuguese government’s effort to pin the cost of bailouts on investors, not taxpayers.
Credit Agricole was among the biggest shareholders in the lender. It said the loss contributed to a drop in its second-quarter net profit to 705 million euros from 1.39 billion euros in the equivalent period of last year.
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