Credit Agricole backs out of SocGen bid amid losses

5 March 2008

After making a $1.3 billion loss for the fourth quarter of 2007, Credit Agricole has confirmed that it is not interested in attempting to bid for troubled bank Societe Generale.

Analysts had thought that the French bank could have used SocGen's weakened position to acquire its rival at a bargain price, but after taking a $5 billion writedown, Credit Agricole is not looking to make acquisitions.

While analysts had forecast a loss for the fourth quarter the general consensus had been that the amount would be in the region of $910 million.

France's third most valuable bank made a profit of about $1.67 billion for the same period last year.

Credit Agricole admitted that the writedown in the final quarter was made at its Calyon investment banking division and even disregarding this, profits at the arm dropped by a quarter.

After exposure to bond insurers, the charge ended up being about $1,215 million more expensive than the bank had predicted.

Chairman Rene Carron ruled out a SocGen takeover, but confirmed that the bank plans to raise its dividend by 4.3 per cent to be paid in cash or a mix of cash and shares.

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