Shares have fallen nearly 10 percent at French bank Credit Agricole and Britain has sold a 2.1 billion pound ($3.3 billion) stake in Royal Bank of Scotland, to kick off the disposal of its holding seven years after bailing out the bank. Hayley Platt reports
It's earlier than planned and will lose UK tax payers £1.1 billion. But Britain's government still sold a £2.1 billion stake in Royal Bank of Scotland in a quick-fire sale to investors. Seven years after the bank was given a £46 billion bailout, Finance Minister George Osborne said the time was right. The taxpayer may not agree, says CMC Market's Michael Hewson. SOUNDBITE: Michael Hewson, Market Analyst, CMC Markets, saying (English): "We could see the share price of RBS go up and if we incrementally push out stakes over the next few years we could actually minimise some of that taxpayer loss but I think it's wishful thinking for people to expect for the taxpayer to break even." In France, Credit Agricole's new chief is shaking things up. Just two months into the job and Philippe Brassac is busy reorganising his management team. But he hasn't been able to work fast enough, due to what he calls "constraints" encountered during talks with the European Central Bank. That caused shares to fall almost 10 percent, despite a rise in net income in the second quarter to 920 million euros - from 17 million a year ago. SOUNDBITE: Michael Hewson, Market Analyst, CMC Markets, saying (English): "Certainly the earnings growth does appear to be coming back and I think going forward really we just have to wait and see as to whether or not the focus on a much more domestic base bears dividends." Credit Agricole also booked an additional 350 million euros in litigation provisions, which now total 1.6 billion euros. It's hoping to settle with U.S. authorities over allegations it processed payments for countries and individuals facing U.S. sanctions later this year.