Weak second-half earnings reported by major French banks on Thursday showed them now suffering from an economic slowdown in addition to further losses from the US subprime mortgage crisis. France's biggest retail bank Credit Agricole reported second-quarter net profits of just 76 million euros ($112 million), saying its financial and investment services suffered from the depreciation of assets. Investment bank Natixis meanwhile saw its share price plummet Thursday when it reported a net loss of 948 million euros for the first half of 2008 while revenues fell by almost two thirds to 1.55 billion euros. “Natixis has felt the full force since June of the sudden and violent decline in the financial markets,” the bank's director Dominique Ferrero told a conference call. The young bank dragged with it its parent companies, the major lending groups Banque Populaire and Caisse d'Epargne. Banque Populaire reported that its net profits plummeted more than 90 percent in the first half. Caisse d'Epargne, which has a 35 percent stake in Natixis, said its net profits tumbled to a mere 21 million euros in the first half of this year from 1.45 billion euros in 2007. The group “has suffered the consequences of the crisis which have weighed on its financial results,” it said in a statement. “The good performance in commercial activity, insurance and property services do not fully compensate for the negative effects of this crisis.” The Credit Agricole figures beat some analyst forecasts but were heavily down on the same period in the previous year - a year-on-year drop of 94 percent. Net banking income for the second quarter of 3.25 billion euros was almost entirely eaten up by operating costs, the results published Thursday showed. Credit Agricole's finance and investment division Calyon suffered losses of 855 million euros in the second quarter due to heavy depreciation of its assets and a slowdown of business activity, the bank said. Earlier this year Credit Agricole announced its net income for 2007 had fallen 16.8 percent to 4.04 billion euros in the wake of the crisis linked to US high-risk subprime mortgages. In June, it launched a 5.9-billion-euro capital increase aimed at shoring up its resources after the subprime-related losses. Another leading French bank, BNP Paribas, earlier this month reported a 34-percent fall in second-quarter profit to 1.5 billion euros ($2.3 billion), citing the impact of the US subprime meltdown.
