Back to the land

13 May 2008 By Pierre Briancon

The huge mutual is supposed to be staid, but turned out to be the most exposed of the big French banks to the subprime crisis. After further writedowns, it is turning to its shareholders for a big slug of capital. This signals the end of Agricole s exotic adventures.

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Credit Agricole SA, the French mutual bank, Tuesday said it would launch a E5.9bn rights issue to shore up its balance sheet after being hit by the subprime crisis and its aftermath.

The bank also said it would book subprime related losses of E1.2bn in the first quarter, with net income at E892m.

Agricole said it set an objective of an 8.5% tier one ratio which it will keep at between 8 and 8.5% "as long as market conditions remain unchanged".

Credit Agricole firstquarter full results will be released May 15. The bank's shares were down 6% Tuesday in midday trading, giving it a market capitalisation of E32.7bn.

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