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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.
Credit Agricole reserves the right to take legal action should any issues arise out of the probes, a spokeswoman for the bank said.
"The new management [of BES] has indicated that it would consider taking legal action, and we will take part," Mr Chifflet told journalists.
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.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.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.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.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.