PARIS (Reuters) – Crédit Agricole SA reported better-than-expected first-quarter results on Wednesday, driven by lower cost of risk and trading activities boosted by market volatility, pushing the stock up. .

The second French bank by market capitalization, after BNP Paribas, generated a net profit multiplied by 2.1 to 1.23 billion euros over the past quarter, where analysts expected an average of 816 million euros according to a consensus reached by the group.

Over the January-March period, its revenues increased by nearly 10% while its cost of risk, which measures the level of provision for bad debts, was halved.

In a research note, Jefferies analysts hail the performance of Crédit Agricole SA, especially in market activities, insurance and retail banking in Italy.

Those of JP Morgan are, however, a disappointment on the performance in specialized financial services.

On the Paris Stock Exchange, the Crédit Agricole SA share benefited from the quarterly results and rose more than 5% to 11.70 euros in the first exchanges, thus signing the largest increase in the CAC 40 index.

The bank’s market activities posted revenues up 36.8% to 941 million euros, supported by activities on rates, currencies and commodities (FICC) where the group is doing better than its competitors such as BNP Paribas , Deutsche Bank or Goldman Sachs.

The bank underlines in a press release the “recovery of the primary credit market and the performance of hedging products”, while investors had their eyes on the health of the financial sector after the rout of several American regional banks and the rescue of Credit Suisse by UBS in Europe.

However, Crédit Agricole expects a slowdown in trading in the second quarter with the drop in volatility.

“I think there will obviously be a form of slowdown. (…) With market volatility decreasing, the hedging needs of our customers are also decreasing,” said Xavier Musca, Deputy CEO of Crédit Agricole SA in charge of large clientele, during a press conference.

Jérôme Grivet, Deputy Managing Director of Crédit Agricole SA in charge of steering and control, also indicated that since the beginning of the year, the bank had reduced its exposure to Russia by 500 million euros to 2, 4 billion euros at the end of April compared to 4.6 billion euros at the start of the war in Ukraine in February 2022.

At the same time, Crédit Agricole SA confirmed its objectives for 2025.

(Report Mathieu Rosemain, Matthieu Protard, edited by Jean Terzian, Kate Entringer and Blandine Hénault)

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