By Elena Vardon

Credit Agricole reported a smaller-than-expected fall in net profit for the third quarter of 2024 but softer revenue missed views, sending its shares lower.

The French lender made 1.67 billion euros ($1.82 billion) in net profit--or net income group share--for the three months ended Sept. 30, a 4.7% decline from the same quarter the previous year, which had benefited from one-off provision reversals, it said Wednesday. Consensus estimates taken from a Visible Alpha poll had penciled in a 1.57 billion-euro result.

Revenue at the listed vehicle of Credit Agricole Group, France's second-largest lender by market capitalization, grew 2.3% to 6.49 billion euros for the period but came in below the 6.57 billion figure expected.

This was partly driven by the better-than-expected performance of its retail banking unit as home and corporate loan origination recovered gradually in France. While French retail continued to see a delayed benefit from higher interest rates, its international retail banking revenue slipped on-year with a decline in net interest margin in Italy--its second home market--weighing on the result.

Business momentum at its fee-geared businesses that are well-placed to benefit from a lower interest-rate environment also contributed to the result, it added. Within its large customers division, revenue at its corporate and investment bank rose 8.2%, helped by the rebound in trading and capital markets activity, which has also benefited its European and U.S. peers.

Credit Agricole-owned asset manager Amundi last week reported that its assets under management stood at a record 2.192 trillion euros at the end of the quarter.

However, the result from its specialized financial services and insurance divisions was worse than analysts had estimated. "Expected strength in insurance revenue was dashed by weather-related crop claims in [property and casualty]," Jefferies analysts said in a note to clients.

Shares in Paris fell as much as 6.1% before recovering some ground to trade at 13.7 euros and limit its year-to-date gains to around 6%. Brokerage Keefe, Bruyette & Woods described the results as slightly underwhelming.

The group reiterated that it expects to surpass 6 billion euros in net income group share in 2024--a year ahead of its targets--while consensus stands at 6.69 billion.

Its common Tier 1 equity ratio--a measure of balance-sheet strength--stood at 11.7%, in line with expectations.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

November 06, 2024 08:48 ET (13:48 GMT)

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