Credit Agricole replaces Calyon chief; to sell off assets

Source: Exec Digital UK

Date :15/05/2008 09:28:59

Patrick Valroff will replace Marc Litzler the head of investment bank unit Calyon, Credit Agricole SA, France’s largest retail bank said Thursday.

Mr. Litzler came under pressure last September after Calyon announced an unauthorized trading loss. It had to book a €250 million charge related to an unauthorized trading position at its New York subsidiary.

Mr. Valroff's current post will be taken by insurance division chief, Jean-Yves Hocher.

Plunging profits

The announcement came as the Paris-based bank confirmed a plunge in profits that it blamed on the effects of the financial market turmoil on its corporate and investment banking operations.

The group confirmed its net profit in the first quarter was €892 million, down from €2.655 billion a year earlier, as its CIB operations had a net loss of €795 million against a year-earlier profit of €539 million.

The bank plans to launch a €5.9 billion rights issue before the summer, subject to market conditions, and had identified €5 billion worth of potential disposals over an 18-month period to bolster its financial position.

Subprime-related writedowns at Calyon totaled €1.205 billion.

Cutting costs

Credit Agricole will develop a new strategy and restructuring plan for Calyon by September, focusing on its core expertise and clients and to reduce the proportion of capital allocated to it.

The bank said it would cut around ten percent of costs at Calyon, which will save €150 million in 2008.

May 15, 2008