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Credit Agricole hit by Banco Espirito Santo troubles | Credit Agricole hit by Banco Espirito Santo troubles |
(35 minutes later) | |
French bank Credit Agricole said profits almost halved after it wrote off the value of its stake in the troubled Portuguese Banco Espirito Santo (BES) to zero. | French bank Credit Agricole said profits almost halved after it wrote off the value of its stake in the troubled Portuguese Banco Espirito Santo (BES) to zero. |
Credit Agricole said 708m euros (£563m) had been written off. | Credit Agricole said 708m euros (£563m) had been written off. |
The French bank apologised to investors, saying that it had been "misled". | The French bank apologised to investors, saying that it had been "misled". |
Portugal unveiled a plan to rescue BES on Monday after record losses of 3.6bn euros for the first half of the year. | Portugal unveiled a plan to rescue BES on Monday after record losses of 3.6bn euros for the first half of the year. |
Credit Agricole, which has a 14.6% stake BES, said second quarter net income was 705m euros compared with profits last year of 1.3bn euros. | Credit Agricole, which has a 14.6% stake BES, said second quarter net income was 705m euros compared with profits last year of 1.3bn euros. |
"We can only regret having been misled by the family with which Credit Agricole was trying to create a true partnership to build the biggest private bank in Portugal," CA's chief executive Jean-Paul Chifflet said. | "We can only regret having been misled by the family with which Credit Agricole was trying to create a true partnership to build the biggest private bank in Portugal," CA's chief executive Jean-Paul Chifflet said. |
Mr Chifflet added that Credit Agricole was closely following investigations and audits underway at BES. | Mr Chifflet added that Credit Agricole was closely following investigations and audits underway at BES. |
Despite CA's problems, the company's shares opened almost 5% higher on Tuesday. Analysts said the bank's profit before tax was higher than expected. | |
On Sunday, Portugal revealed 4.9bn-euro rescue plan for BES. | |
Shares in the Portuguese bank have plunged 89% since June, when concerns about the financial health of the company first came to light. | |
Last week BES reported a 3.6bn euro loss, which wiped out its existing capital buffer of nearly 2.1bn euros and cut it to below the minimum level required by banking regulators. |