By Silvia Aloisi and Matthieu Protard
PARIS (Reuters) - Shares in Credit Agricole SA fell as much as 5% on Thursday after the French bank reported lower-than-expected revenues in the third quarter, driven by weaker trading proceeds and withdrawals at asset manager Amundi.
Underlying revenues in the three months to September came to 5.59 billion euros ($5.56 billion), 2% below analysts' average forecast, and the CET 1 ratio - a key measure of financial strength - also weakened more than expected to 10.7%.
Credit Agricole "continues to suffer from a less favourable revenue mix than peers in the current context," said Jefferies analysts.
They noted the bank is geared towards asset gathering, which is being hit by market volatility, while it has more limited exposure to trading and car fleet management operations, which helped boost revenues at rivals BNP Paribas and Societe Generale.
Amundi, majority owned by Credit Agricole, posted net outflows of 12.9 billion euros for the third quarter, hurt by weak markets and concern about the economic outlook due to the war in Ukraine.
The bank's capital markets and investment banking revenues, which have boosted rivals as they benefited from wild market swings, fell by 5.7% in the quarter.
"Globally we have a lower risk profile than rivals, which means we may profit less from volatility," said Credit Agricole Deputy Chief Executive Xavier Musca.
The shares were down 4% at 1143 GMT, even though the bank got a show of support from its controlling investor - SAS Rue La Boetie - which said it would buy up to 1 billion euros of the bank's shares by the end of the first half of 2023.
Credit Agricole was founded in 1894 to support farmers, and the SAS Rue La Boetie holding company groups the regional cooperative lenders that are the bank's main shareholders since it was privatised and then listed on the market in 2001.
The holding company, which currently has a stake of 57% in the bank, set to rise to around 60% with the planned stock purchase, said in a statement it would not go beyond 65%.
On a brighter note, Credit Agricole, like most European banks, managed to take advantage of rising interest rates to post a strong increase in corporate loans, up by 15.4%, and consumer finance, which rose 12.6%.
Net income came in at 1.35 billion euros, down 3.6% from a year earlier but above analyst forecasts for 1.2 billion euros, as the bank set aside less money to cover souring loans than expected despite fears of a looming European recession.
That might add to tensions between some euro zone lenders and their supervisor, the European Central Bank, which according to sources believes some lenders have overly optimistic assumptions about the economy and should preserve more capital.
Credit Agricole also said it was continuing negotiations with Italy's Banco BPM SpA. It is competing with French insurer AXA SA to distribute non-life products through branches of Italy's third-largest bank in a deal worth around 300 million euros, people familiar with the matter have said.
($1 = 0.9996 euros)
(Reporting by Matthieu Protard and Silvia Aloisi; Editing by Christopher Cushing and Mark Potter)