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Bloomberg
Credit Agricole SA got a boost from clients selling bonds and set aside less money for expected bad loans, joining peers in taking a benign view of the pandemic as Europe enters a second phase of lockdowns.
Revenue from capital markets, the biggest driver of Credit Agricole’s investment bank, surged 25% in the third quarter to beat analysts’ highest estimates. The bank earmarked 577 million euros ($673 million) to deal with souring loans, less than in the previous two quarters, primarily to cover sectors vulnerable to renewed lockdowns in Europe including aviation, hotels and restaurants.
Chief Executive Officer Philippe Brassac, who has been betting on corporate banking and asset management to offset weak consumer margins, joined the chorus of European peers urging an eventual return to dividend payments. While a strong markets performance and extensive government economic aid packages have so far boosted lenders across region, a deteriorating backdrop of new infections and restrictions threatens to bring more pain.
Credit Agricole will review its economic model in the last three months of the year, after sticking to its existing scenario this quarter, CFO Jerome Grivet told reporters.
“However, we cannot infer that this will lead to an explosion in the cost of risk,†he said, referring to provisions for bad loans.
Credit Agricole swung between gains and losses in early trading, as markets weighed the outcome of the US elections.