France’s second largest bank surpasses profit expectations while competitor Société Générale sees earnings dip.
ADVERTISEMENTCredit Agricole (CA) announced a 55% year-on-year increase in first-quarter net profits on Friday.
Earnings came in at €1.9 billion, outperforming the €1.48 billion average predicted by analysts.
In the previous quarter, CA's sales climbed 11% to €6.81 billion, also beating analysts' expectation of €6.47 billion.
The cost of risk, meaning capital set aside to cover potential losses from loans, was €400 million, €105 million less than expected.
The lender said it now plans to meet its 2025 financial targets a year early, boosted by strong performances in its corporate and investment banking divisions.
This would include hitting an underlying net income target of more than €6 billion.
CA also aims to make a return on tangible equity - meaning its physical capital - of more than 12%.
Higher interest rates have allowed European banks to charge greater fees on loans, boosting profits.
However, not all lenders have fared as well as CA.
France's third-biggest bank, Société Générale, announced on Friday a 22% year-on-year slide in first quarter net profit, which came in at €680 million.
This beat analysts' estimate of €463 million, but is still unlikely to cheer investors.
Revenues in the quarter also surpassed forecasts but were down 0.4% year-on-year.
Under the leadership of CEO Slawomir Krupa, who took over nearly a year ago, the bank has embarked on a major cost-cutting programme.
SocGen announced that first quarter operating expenses came to €4.98 billion, down 1.5% compared to the same period last year.
A ray of hope for the lender lay in its equities trading division.
It recorded revenues of €870 million for the first three months of the year, up 3.1% year-on-year.
