Credit Agricole beats profit expectations, capital markets unit lags
PARIS, Nov 10 (Reuters) - Credit Agricole SA's third-quarter profit beat expectations on Wednesday due to lower pandemic-related provisions for bad loans and higher revenue in retail banking, offsetting weaker revenue in capital markets and insurance.
France's second-biggest listed lender said net income rose 43.5% in the third quarter to 1.40 billion euros ($1.62 billion)and beat a mean forecast for 1.23 billion euros in a poll of analysts compiled by Refinitiv.
Revenue was up 7.4% to 5.53 billion euros, above the 5.46 billion euros forecast by analysts, while its cost of risk - reflecting provisions against bad loans - fell by 56.1%.
Credit Agricole's chief executive officer Philippe Brassac confirmed the lender was on track to meet its 2022 targets, including a 5 billion euro net profit.
"There is no reason today to change our target," Brassac told reporters.
In retail banking, revenue was up 5.1% in France and rose by 32.6% in Italy, where the lender acquired local lender Creval earlier this year.
But Credit Agricole lagged rivals in corporate and investment banking (CIB) as it is less exposed to the equity derivatives market and did not benefit from the rebound in equity trading in the quarter.
Revenue was down 3.7% in the CIB business. That compares with a 16.1% rise in CIB revenue at Societe Generale and a 6.4% increase at BNP Paribas.
Brassac made it clear the bank would not change its strategy in the investment banking landscape to bet on what he called a short term opportunity as the COVID-19 crisis is not over yet.
Analysts at JP Morgan noted that revenues in insurance and capital markets were below analysts' expectations but higher in financing activities, French retail banking and asset management. ($1 = 0.8655 euros) (Reporting by Matthieu Protard and Marc Angrand; Editing by Muralikumar Anantharaman and Louise Heavens)
