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FINANCIALS: CABKSM: Positive Results, Spread Positive

FINANCIALS

Credit Agricole (ACAFP: A3/A-/A+) figures are good overall with revenue and loan loss beats driving a 13% pre-tax beat. Spreads have widened 2bp in the last month (€IG banks -3bp) so expectations were relatively low so today appears a spread positive event, in our view. This is a positive for BPCE, BFCM and the other French bank issuers, we feel.

  • Credit stats: loan losses are stable (at 32bp), around 13% better than consensus. None of the businesses showed divergent trends. Non-performers are stable q/q (at 2.2%, in line) and CET1 is broadly in line with expectations, too. So, solid, if not spectacular, figures.
  • Revenues are 5% ahead of expectations driven by asset gathering and big beat in large commercial banking and primary IB revenues. Questions are sustainability are likely here, we feel. Costs are only 2-3% above expectations meaning pre-tax is a 13% beat.
  • There are no obvious guidance changes in here but that revenue performance, at least in commercial banking, is likely to drive a small revenue upgrade which should push earnings ahead.

Conf call is 1000 (London time) at: https://edge.media-server.com/mmc/p/a6p4bs6r

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