Net income quadrupled to Crédit Mutuel
March 24, 2010
Crédit Mutuel reported net income quadrupled in 2009 to 1.8 billion euros, with a net increase in revenues that offset the increase in provisions for credit risk because of the crisis.
The French mutual bank, parent company of Crédit Industriel et Commercial, saw last year's net banking income increased 61% to 13.573 million euros through the acquisition of the retail banking for Citigroup in Germany, renamed Targo Bank, and the takeover of the specialist consumer credit Cofidis.
At constant perimeter, the banking group said its revenues rose 37.5%.
Like other banks, Credit Mutuel has recorded in its accounts of risk provisions for losses on loans to companies and households increased sharply to 2.37 billion euros against 1.40 billion a year earlier .
"Basically, the risks were doubled," said Stephen Pflimlin, Chairman of Crédit Mutuel at a news conference.
The mutual bank is the latest French bank to publish its 2009 accounts. BNP Paribas, which acquired last year the Belgian Fortis has reported a net profit of 5.83 billion euros in 2009.
The Crédit Agricole group has in turn reported a net profit of 2.75 billion euros while earnings from Societe Generale came out to 678 million.The BPCE mutual bank, which controls nearly 71% of Natixis, posted a profit of 537 million.
CAUTION FOR 2010
Crédit Mutuel was cautious for the current year.
"Our short-term forecasting (…) are not too bad but that does not reassure us about what may happen in the coming months," said Stephen Pflimlin. "The crisis is over when unemployment begins to fall," he added.
The Chairman of Crédit Mutuel has however welcomed the ratios of financial solvency of the bank.Its equity amounted to 30.62 billion euros and its ratio of "tier one" appears to 11.8% at end 2009.
Asked to react to the work of the Basel Committee on new banking standards, Etienne Pflimlin estimated that the state, the proposed new regulations penalize strong credit activity of banks and financing the real economy, relaying and warnings of BNP leaders.
Jean-Laurent Bonnafé, Deputy CEO of BNP Paribas, said late last week that the new rules called Basel III, to take effect from the end of 2012, could cost 6 points of growth in Europe (see ).
The leaders also credit mutual fear that U.S. banks, which do not have the current standards of Basel II, does not submit to Basel III, which would create distortions of competition on both sides of the Atlantic .
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