Credit Agricole's Q4 Profit Falls Short Due to Italian Restructuring Costs

Credit Agricole's fourth-quarter profit did not meet analyst expectations due to increased costs from restructuring its Italian operations, according to Jin10. The bank's operating expenses rose by 4.7% to €4.1 billion, surpassing the €3.9 billion forecast by analysts. This increase was primarily driven by restructuring charges and contributions to the Italian deposit protection fund. Additionally, provisions amounted to €629 million, exceeding expectations, and included funds set aside for legal risks related to UK car loans and the recovery plan for Italy's Banca Progetto. These negative factors offset the strong performance of the asset management division and highlighted the challenges faced by CEO Olivier Gavalda in emphasizing growth in overseas markets. Amid a wave of mergers and acquisitions in Italy, Credit Agricole increased its stake in Banco to over 20%. The initial consolidation of this stake resulted in a €607 million reduction in fourth-quarter earnings, although it is expected to contribute approximately €100 million in recurring earnings each quarter in the future.