Credit Agricole shares shine on strong results, Degroof Petercam purchase

By Mathieu Rosemain

PARIS (Reuters) -Credit Agricole reported strong second quarter results on Friday, lifting its shares, and stepped up its wealth management ambitions by confirming plans to buy Degroof Petercam in a deal valuing the Belgian firm at 1.5 billion euros ($1.64 billion).

France's second-largest listed lender, which is a controlled by 39 regional banks, beat analysts expectations for the quarter with record sales and revenues, helped by performances in insurance and consumer finance.

The results boosted Credit Agricole SA's stock, which was up by about 5% at 0817 GMT, making it the best performer within France's blue-chip index CAC 40.

Helping the positive sentiment, the investment vehicle of the mutual banks that control Credit Agricole said it would spend 1 billion euros on the bank's shares, further tightening its grip on the lender.

The vehicle currently owns 60.2% of Credit Agricole SA and said it had no intention to go beyond 65%.

Credit Agricole's second quarter net income rose 25% from a year earlier to 2.04 billion euros ($2.23 billion), above the 1.39 billion euro average of analyst estimates compiled by the bank. Quarterly sales rose by 19% to 6.68 billion euros, also beating the consensus.

"(It) reported a solid set of results ... driven by higher-than-expected revenues and good cost control," Royal Bank of Canada said in a note. Barclays and JP Morgan also called the results "strong", highlighting cost control management.

Credit Agricole's planned acquisition of Degroof Petercam , which it expects to close in 2024, would increase the scope of its wealth management subsidiary Indosuez by roughly 50%.

Degroof Petercam has client assets of 71 billion euros, while Indosuez said it had assets under management of 130 billion euros at the end of 2022.

At 148.03 euros per share before various possible adjustments, the price offered for the 60% stake Indosuez agreed to buy in Degroof values the Belgian wealth manager at 1.54 billion euros, according to a regulatory filing on Friday.

The takeover means one of the best known names in Belgian finance will come under foreign ownership, continuing a long trend of buyouts which has left only KBC as a major privately-owned financial institution in the country.

Xavier Musca, head of Credit Agricole's investment bank, told reporters the lender aimed to own 80% of Degroof Petercam after the acquisition of a number of family-held stakes.

The Belgian Cigrang family would retain 20% under the plan, Musca said, under a partnership deal signed with them.

($1 = 0.9136 euros)

(Reporting by Mathieu Rosemain; Additional reporting by Geert de Clercq and Piotr Lipinski; Editing by Ingrid Melander, Augustin Turpin and Alexander Smith)