Credit Agricole posted a 6.5 billion-euro ($8.68 billion) full-year loss - the worst since the French bank went public in 2001 - as taxes on the sale of its Greek unit pushed the bank deeper than expected into the red.
Bank executives told reporters an unexpected decision by French tax authorities to disallow a tax deduction the bank was seeking for the sale of Emporiki Bank triggered an 838 million-euro tax hit, pushing fourth-quarter writedowns to 4.53 billion.
"The government told us very recently - (Monday) to tell the truth - that we could no longer deduct taxes from these losses," Chief Financial Officer Bernard Delpit said on a conference call.
The shock tax bill was just the latest blow for the 119-year old lender, which has spent the last year grappling with the legacy of ill-fated expansion binges into Italy, Spain and Greece and shrinking its investment bank to refocus on French retail banking.
The tax expense, on top of previous writedowns mostly related to the impact of a worsening economic outlook on goodwill, pushed the quarterly loss at France's No. 3 bank to 3.982 billion euros.
Credit Agricole said on Wednesday its "normalised" profit excluding one-off items rose 10 percent from a year ago to 548 million.
Analysts polled by Thomson Reuters I/B/E/S had forecast net income of 402 million euros on average, but it was unclear whether their forecasts stripped out the same elements as the bank's normalised figure.
Quarterly revenue fell 23 percent including the negative accounting impact of the rising value of the bank's own debt to 3.326 billion euros, missing the 3.691 billion average of analysts' estimates.
NO DIVIDEND
"In 2012, we turned the page and profoundly transformed the group," Chief Executive Jean-Paul Chifflet told journalists. "Leaving Greece cost us dearly but it was a necessary decision.
"Credit Agricole, which will pay no dividend on 2012 results, confirmed that it is targeting a Basel 3 common equity Tier 1 target greater than 10 percent for the end of 2013.
The semi-cooperative bank, which is majority controlled by a network of regional lenders, plans to announce a new three-year business plan in the autumn of this year, Chifflet said.
"There will be two main priorities governing the undertaking: the acceleration of improvements to our universal customer-focused bank and a deepening of changes that we've already begun on specialised financial services," Chifflet said.
While Credit Agricole has now sold out of Greece, its Italian banking and consumer credit operations remain a concern. Its Cariparma unit there posted a 10 million euro loss for the quarter with loan writedowns rising.
The Italian unit also roughly doubled an existing voluntary layoff plan to 720 employees. ($1 = 0.7487 euros)
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