Credit Agricole reports profit leap, shares surge

French bank Credit Agricole reported a net profit leap in the first quarter, saying that its regional banks and investment arm had done well. The parent and quoted holding company for the collection of regional banks, Credit Agricole SA (CASA), said that net profit in the first quarter had risen by 30.0 percent to 868 million euros ($1.2 billion). This was better than expected by analysts polled by the Bloomberg financial news agency, who had expected on average a figure of 848 million euros. The price of shares in the parent entity surged by 3.20 percent to 11.46 euros in morning trading to head the French CAC 40 index which was down 0.40 percent. The regional banking group operations raised net profit by 15.0 percent to 1.42 billion euros. The chief executive of CASA, Jean-Paul Chifflet, told a telephone press conference: "Our results are good even though the economy is sluggish." Net bnking income, which shows the bank's margin on taking in deposits and making loans, rose by 0.7 percent to 4.01 billion euros for CASA, and for the group of regional banks it rose by 1.1 percent to 7.75 billion euros. The regional retail banking activities, the LCL Credit Lyonnais subsidiary and international operations, made progress. The investment banking arm went against the trend for the sector and raised income by 3.2 percent. Overall provisions for doubtful loans fell by 20 percent, mainly because of an improvement in the Italian consumer credit business Agos Ducato. The group said that it was ahead of its solvency targets. Its ratio of shareholder funds to risks taken on was was 11.7 percent at the end of March, and was 9.0 percent for CASA, under Basel III post-crisis rules. It said it was aiming for a group ratio of 14.0 percent and for CASA of more than 10.5 percent in 2016.