Credit Agricole's Q4 profit beats forecasts, hikes dividend

By Mathieu Rosemain

PARIS (Reuters) - Credit Agricole, France's second-biggest listed lender, reported slightly better-than-expected fourth-quarter profits on Thursday, as corporate and retail banking activities offset a tumble in revenues at its insurance division.

Group net income in the fourth quarter fell 25% from a year earlier to 1.33 billion euros ($1.43 billion), above the 1.28 billion-euro average of analyst estimates compiled by the company.

However, sales missed expectations, coming in at 6.04 billion euros in the last three months of 2023, up 1.2% but below the average estimate of 6.16 billion euros.

Credit Agricole, which is a controlled by 39 regional banks, said its fourth-quarter so-called cost of risk - money set aside for failing loans - was better than expected, at 440 million euros.

The bank hiked dividend by 24% for 2023, compared to 2022, to 1.05 euro per share.

The listed entity of Credit Agricole Group said revenue from its "large customers division," which includes its investment bank and CACEIS, the asset servicing business it co-owns with Santander, grew 8.5% in the fourth quarter, thanks to the integration of RBC Investor Services' European activities.

French retail banking net income rose by 4.2%, driven by an increase in net interest income - the difference between the interest banks earn on loans and pay out on deposits - as lenders increasingly benefit from higher interest rates in the country.

Sales at Credit Agricole's insurance business, however, plummeted 47% from a year earlier, because of high weather-related claims during the period.

With a yearly net income of 6.35 billion euros, an annual return on tangible equity (ROTE) of 12.6% and cost-to-income ratio of 54.1% last year, Credit Agricole said it had fulfilled in 2023 its financial targets set for 2025.

The company did not raise its 2025 term targets.

($1 = 0.9283 euros)

(Reporting by Mathieu Rosemain; Editing by Tommy Reggiori Wilkes)