Credit Agricole report a 71 percent fall in first-quarter net income, weighed down by the launch of its plan to revamp complex shareholding ties with its parent group. As Hayley Platt reports weakness in French retail and investment banking also also a problem for the French lenderweighed..
It's in the midst of a major overhaul to simplify its ownership structure. And that's hurting Credit Agricole's bottom line, along with weakness in French retail and investment banking. First quarter results were slightly worse than forecast. And a lot worse than the same time last year. It's a familiar story, most major European banks have reported weak earnings. (SOUNDBITE) (English) CMC MARKETS, MARKET ANALYST, MICHAEL HEWSON, SAYING: "Financial market volatility at the beginning of this year has compressed margins particularly on the investment banking side but you've also got the fact that the negative interest rate environment is also compressing margins on the retail banking side between the deposits and the lending, having to deal with those and restructuring costs is really hitting the bottom line." Earlier this year the bank's boss Philippe Brassac announced a major structural overhaul. Aimed at smoothing internal divisions and reassuring investors. But it's proving costly. Net interest margin, a closely watched measure of how much money banks make from their loans, also fell in France by 15.8 percent. Credit Agricole blamed early repayments on home loans and an exceptionally high number of renegotiations. Even a fall in bad loans weren't enough to offset the overall losses.