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CREDIT AGRICOLE SA: CREDIT AGRICOLE SA : First half 2009 and Q2-09

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^{Published in Business and Finance on Thursday, August 27th 2009 at 8:03 GMT by Market Wire}  

PARIS--(Marketwire - August 27, 2009) - Crédit Agricole Group*

Second quarter 2009

Net income - Group share: EUR 663 million (up 55.3 % on Q1-09; up 2.4x on Q2-08)

First half 2009

Net income - Group share: EUR 1,090 million (down 31.7% on H1-08)

*Crédit Agricole S.A. and 100% of the Regional Banks

Crédit Agricole S.A.

Second quarter 2009

- Solid growth in business line revenues: + 12.3% / Q1-09

- Risk-related costs stable: + 3.9% / Q1-09

Net income - Group share: EUR 201 million

(stable on Q1-09, up 2.6x on Q2-08)

First half 2009

- Revenues up sharply: +17.1% / H1-08

- Expenses tightly controlled: - 6.3% / H1-08

- Gross operating income up sharply: 2.7x / H1-08

- Equivalent rise in risk-related costs: 2.7x / H1-08

Net income - Group share: EUR 403 million.

- Net income per share for the first half: EUR 0.18

- A solid financial position: Tier One ratio: 9.2%

Crédit Agricole S.A.'s Board of Directors, chaired by René Carron, met on 26 August to review the accounts for the first half of 2009. Net income - Group share was EUR 403 million in the first half and EUR 201 million in the second quarter.

In a persistently difficult world economic climate, these results reflect the initial effects of the business model that the Group adopted a year ago.

This model is based on a powerful retail bank that encompasses all banking and insurance businesses and on a corporate and investment bank that focuses on its core areas of expertise to serve the Group and its customers.

The first step of the implementation of this business model was to refocus the Corporate and Investment bank with a strategy of significantly reduced risk profile. Structured credit operations and toxic products are being run off and their negative impact on earnings will gradually reduce in the future. As a result of these efforts, market risk declined by EUR 8 billion in the first half to less than EUR 20 billion at 30 June 2009.

Crédit Agricole S.A. has taken a number of measures to underpin its business model, to enhance the effectiveness of the businesses by achieving economies of scale and optimising management through stringent cost controls across all entities. These include combining the life, Property & Casualty and creditor insurance lines into the recently created Crédit Agricole Assurances; the combination of Sofinco and Finaref, after the one of Agos and Ducato in Italy; signature of the final CAAM-SGAM agreement to create the No. 4 asset manager in Europe, 75/25 owned by Crédit Agricole S.A. and Société Générale; the acquisition of an 85% controlling interest in CACEIS and the centralisation of Cariparma and FriulAdria's general services.

All business lines sustained their momentum. Business for the Regional Banks and LCL remained high despite the economic downturn, with a 3.7% year- on-year rise in aggregate loans outstanding for the two entities in the first half of 2009. Business was also robust for the Consumer finance subsidiaries. Likewise, momentum was brisk in asset management operations, as reflected primarily in the performance of the Insurance and Asset management lines, where inflows benefited from the market rebound. International retail banking registered a substantial increase in revenues in the second quarter 2009, reflecting good resilience year-on-year, excluding Emporiki.

This momentum increased Crédit Agricole S.A.'s net banking income sharply, with a 17.1% year-on-year jump in the first half of 2009, following the acceleration of this trend during the second quarter. Gross operating income was multiplied by 2.7 on tightly controlled operating expenses, which declined by 6.3%. This offset an equivalent increase in risk-related costs, which were also multiplied by 2.7 and stabilised at a high level in the second quarter. Operating income improved appreciably as a result of our new business model, which places the priority on generating solid, recurrent earnings.

Lastly, the Group confirmed its financial strength. Core capital remained high at EUR 63.1 billion. Risk-weighted assets were down 4.1%, owing primarily to the reduced risk profile of Corporate and investment banking. Crédit Agricole S.A.'s Tier 1 ratio is at 9.2% with a Core Tier 1 ratio of 8.6%, up from 8% at 1 January 2009.

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After the Board of Directors' meeting, René Carron, Chairman of Crédit Agricole S.A., commented:

"The new model that Crédit Agricole S.A. adopted nearly a year ago now fully reflects our Group's original values: taking account of the human dimension of a situation; dedicating our resources to provide financing to the economy and support to our individual and business customers in this time of crisis".

Georges Pauget, Chief Executive Officer of Crédit Agricole S.A., added:

"Crédit Agricole S.A. has fully integrated the lessons learnt from the crisis and has adapted its business model to meet the needs of the real economy. This is not only a relevant but sound strategy for the Group. All our historic business lines are producing good results which allows us to deal with the impact of the current crisis. Retail banking, insurance, asset management and consumer finance delivered very good performances, despite the adverse economic climate. "

This information is provided by HUGIN