PARIS (Thomson Financial) - Credit Agricole will report a year-on-year plunge in its first-quarter net profit on Thursday, amid major writeoffs and ongoing concerns about activity in its corporate and investment banking (CIB) business, analysts said.
According to a Thomson Financial poll, analysts are predicting, on average, a net profit of 1.280 billion euros, which is less than half of the 2.655 billion euros made the same time last year.
Analysts at Keefe, Bruyette and Woods projected 1.487 billion euros in writeoffs in the first quarter. They said there is residual net exposure to collateralized debt obligations (CDOs), for which writeoffs will be around 411 million euros.
They also called visibility for the CIB operation "limited" because there is still potential for further markdowns and higher regulatory capital requirements for investment banking operations.
The Keefe, Bruyette analysts see Credit Agricole, which reports its results before the market opens, posting a net profit of 1.026 billion euros, with operating profit at 907 million.
Analysts at Deutsche Bank, also focusing on the CIB business, said Credit Agricole will not benefit from one-off items such as debt revaluation, and does not have the interest rate derivatives business that BNP Paribas has to compensate for declines elsewhere in capital markets.
However, they said the CIB's financing activities should make a positive contribution.
The Deutsche Bank analysts expect a net profit of 1.441 billion euros, with an operating profit of 2.077 billion. They predict markdowns of about 750 million euros from its monoline insurance exposure.
According to a Thomson Financial poll, analysts are predicting, on average, a net profit of 1.280 billion euros, which is less than half of the 2.655 billion euros made the same time last year.
Analysts at Keefe, Bruyette and Woods projected 1.487 billion euros in writeoffs in the first quarter. They said there is residual net exposure to collateralized debt obligations (CDOs), for which writeoffs will be around 411 million euros.
They also called visibility for the CIB operation "limited" because there is still potential for further markdowns and higher regulatory capital requirements for investment banking operations.
The Keefe, Bruyette analysts see Credit Agricole, which reports its results before the market opens, posting a net profit of 1.026 billion euros, with operating profit at 907 million.
Analysts at Deutsche Bank, also focusing on the CIB business, said Credit Agricole will not benefit from one-off items such as debt revaluation, and does not have the interest rate derivatives business that BNP Paribas has to compensate for declines elsewhere in capital markets.
However, they said the CIB's financing activities should make a positive contribution.
The Deutsche Bank analysts expect a net profit of 1.441 billion euros, with an operating profit of 2.077 billion. They predict markdowns of about 750 million euros from its monoline insurance exposure.
Source - Xinhua