PARIS (Reuters) - Credit Agricole said its French retail bank unit had reached a turning point and that revenues should grow from the levels seen in the fourth quarter last year, as it reported higher overall profits.
Credit Agricole reported on Thursday a 33 percent jump in quarterly profit as its investment banking unit held up well in a tough market environment, helping offset a one-time hit from tax-related items.
Earlier this month, SocGen reported forecast-beating fourth quarter results although profits at BNP Paribas - France’s biggest listed bank - fell short of market forecasts.
Credit Agricole’s outlook comes as other French banks, including BNP Paribas and SocGen have struggled from a weak performance in consumer banking, although all pointed towards a stabilisation of revenue this year.
Credit Agricole’s retail unit LCL, which accounted for a fifth of the bank’s 2017 revenue, reported a 3.9 percent revenue fall, compared to declines of 0.4 percent at BNP Paribas and 1.0 percent at SocGen.
“We have revenue volumes in the fourth quarter which, in our point of view, is the floor of what we are going to see over the coming quarters,” Jerome Grivet, Credit Agricole SA chief financial officer, told journalists.
The bank was also seeing a positive impact from loan growth on net interest income and continued growth in fee and commission income.
SocGen also said it was seeing a slowdown in the erosion of revenues and BNP Paribas had also guided for 2018 revenue of zero to minus 0.8 percent.
While they have cut staff and the number of branches, the banks have also rolled out vast investment plans to upgrade infrastructure and develop new digital products on the back of rising competition from purely online rivals, that has been putting pressure on margins.
“The new entrants are solely digital and this is why they make you think that we are ‘traditional’. We are present physically and digitally...speed of our digital acceleration is very strong,” said Credit Agricole chief executive Philippe Brassac.
Brassac added that there is no profitable online-only bank and that he did not believe in a purely digital business model.
Reporting by Maya Nikolaeva and Matthieu ProtardEditing by Sudip Kar-Gupta