Credit Agricole Q2 net income drops 22% as coronavirus provisions weigh

Credit: REUTERS/Stephane Mahe

Updates with details

PARIS, Aug 6 (Reuters) - Credit Agricole SA CAGR.PA, France's second-biggest listed bank, reported a 22% drop in quarterly profit on Thursday as it took extra provisions against loans that may sour due to the COVID-19 crisis.

Although Credit Agricole's investment bank was the biggest contributor to the increase in provisions, buoyant revenue growth from debt and currency trading, and debt underwriting, helped soften the blow from an economic downturn that hit consumer banking.

Net income fell to 954 million euros ($1.13 billion) in the second quarter, while revenue fell by 5% to 4.9 billion euros, broadly in line with a mean analyst estimate, according to IBES data from Refinitiv.

Revenue at Credit Agricole's 'Large Customers' unit, which includes capital markets and corporate finance activities, rose by 16%.

Revenue at its French retail bank LCL fell by 4%, while revenue from international retail activities and specialised financial services covering consumer finance both declined by more than 10%.

The bank said net profit declined mainly due to a spike in the cost of risk, which reflects the amount of new provisions aimed at covering potential payment defaults and which more than doubled to 842 million euros.

Credit Agricole results, however, shone compared with quarterly losses reported by Societe Generale SOGN.PA and Natixis CNAT.PA.

($1 = 0.8420 euros)

(Reporting by Maya Nikolaeva; Editing by Sudip Kar-Gupta and Kim Coghill)

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