Credit Agricole has reported a 71% fall in first-quarter net income, weighed down by the launch of its plan to revamp complex shareholding ties with its parent group, and weakness in French retail and investment banking.
The bank's CEO Philippe Brassac announced a major structural overhaul earlier this year aimed at overcoming internal divisions and reassuring investors of its capital strength.
This led to the loss of the parent retail banks' contribution to the listed entity's earnings.
Credit Agricole's results also showed its remaining French retail asset, LCL bank, underperformed rivals despite winning clients, hit by mortgage renegotiations and early repayments.
Stronger results in savings management, insurance and specialised financial services, meanwhile, helped partly offset weakness at LCL and at its corporate and investment bank.
Credit Agricole said quarterly net income fell to €227m from €784m a year earlier, hit by the moves to optimise its balance sheet and reduce the future cost of debt carried by the bank.
Analysts in a Reuters poll had on average predicted a 64.5% decline in net income to €278m.
Excluding one-off items, net income fell 9.3% to €394m, the bank said.
Its net interest margin, a closely watched measure of how much money banks make from their loans, fell 15.8% in the first quarter in France, with Credit Agricole citing an exceptionally high wave of renegotiations and early repayments on home loans.
"Net margins are expected to remain under pressure in 2016, and a turnaround is expected in 2017," the bank said.
The bank said that a fall in provisions for bad loans and stable costs were not enough to offset the revenue decline.
