French bank Credit Agricole, one of Europe's biggest lenders, said today its second quarter net profit fell more than 10%, hit by a large charge on its exposure to debt-stricken Greece.
Credit Agricole said its three months to June net profit dropped 10.6% from a year earlier to €339m after provisions of €640m on its Greek business and holdings of Greek government bonds. Its Greek unit Emporiki, acquired in 2006, accounted for nearly €500m of the charge.
Exposure to Greece, which has had to be bailed out twice to save it from default, has seen French banks and some of their European peers take heavy charges against earnings in recent months.
Credit Agricole said earlier that the second quarter charge would not exceed €850m.
During the quarter, it reported net banking income - the difference between interest earned and interest paid out - of €5.53 billion, up 1.1%, producing an operating profit of €2.20 billion, up 6.6%.
Germany's LBBW profit slumps on Greek charges
Germany's biggest regional bank, LBBW, said today its second quarter net profit slumped after it took a charge of more than €450m on its exposure to Greek debt.
It said its three months to June net profit came to just €24m, down from a first quarter profit of €352m. LBBW said it cut the holding or book value of its Greek bond investments by half to €300m.
Sales of derivatives linked to Greece resulted in an additional loss of €156m, a statement said.
The bank said it still expected to post a profit for the full year but warned that the situation in global financial markets would 'remain volatile and susceptible to crises'. 'Moreover, economic prospects across the world are gradually becoming bleaker,' the bank added.
LBBW continues to offload assets under a programme required by the European Commission in exchange for German state aid provided during the 2008-09 global financial crisis. At the end of June, LBBW's total assets amounted to almost €355 billion, a decline of 5.2% from the end of last year.
