French bank Credit Agricole will take a €2bn ($2.6bn) loss on the sale of its ailing Greek lender Emporiki, closing the final chapter in its dismal investment in crisis-torn Greece.
Credit Agricole was the most exposed to Greece among French banks, which have spent the past year slashing Greek investments after an expansion spree during the boom times was torn apart by the eurozone debt crisis.
While Credit Agricole is seen as being able to take the hit without calling on its parent group of deposit-rich regional cooperative banks for more capital, its chief financial officer refused to comment on the possibility of a future cash call.
“This is not a question for today,” CFO Bernard Delpit told an analyst conference call yesterday, asked if the bank would seek a capital increase.
Shares of Credit Agricole have gained 20% since the bank said on October 1 that it was in talks to pay €550mn to Alpha Bank to take Emporiki off its hands.
The final loss disclosed by Credit Agricole, to be reflected in the bank’s third-quarter results, was broadly in line with what analysts had estimated.
Societe Generale analyst Sebastien Lemaire wrote in a note that a tax credit on Credit Agricole’s injection of €4.3bn of capital into Emporiki would limit the loss.