Credit Agricole warns of profit hit over Intesa Sanpaolo
French bank Credit Agricole said Friday a reclassification of its stake in Italian bank Intesa Sanpaolo would lead to a 1.25-billion-euro drop in net earnings in the final quarter of this year.
The termination of Credit Agricole's representation on Intesa Sanpaolo's supervisory board forces the reclassification and revaluation of its 4.79 percent stake in the Italian bank from an equity affiliate to an available-for-sale financial asset.
"Based on Intesa Sanpaolo S.p.A.'s current share prices, this reclassification would represent a negative impact on net profit of around 1.25 billion euros in the fourth quarter of 2010," Credit Agricole said in a statement.
Credit Agricole said it had not initiated proceedings to sell the stake in Intesa Sanpaolo in the short term.
The French bank said the supervisory board representation was terminated earlier than planned given that both banks are expected to begin work on medium-term strategic plans next year.
© 2010 AFP