Credit Agricole, France's biggest retail bank, said today it was considering a €5.9 billion rights issue due to further writedowns at its Calyon investment banking division.
Agricole's confirmation of its planned capital increase came amid mounting speculation of further losses at Calyon and of the ousting of Calyon CEO Marc Litzler.
Like many banks, Calyon has been hit by losses from the global credit crisis. Agricole said it expected Calyon to have writedowns of €1.205 billion during the first quarter due to the credit crunch.
This would lead to a net profit of €892m - down 66% from last year and worse than many analysts' forecasts. Agricole said it planned to lower Calyon's risk profile and cut costs at the division.
In March, Credit Agricole, France's biggest retail bank, announced that its net income for 2007 had fallen almost 17% to €4.04 billion in the wake of the US residential mortgage crisis.
Detailed results for the first quarter will be released later this week.
