Bank bosses face angry shareholders

Crédit Agricole shareholders are furious over plummeting share values caused by exposure to Greece

22 May 2012
By

BOSSES of Crédit Agricole bank have told angry shareholders they are to quit speculative trading and return to “traditional local banking” as it tries to turn round losses of €1.47 billion.

In 2011 Greece cost the bank – the one with the most branches in France – €2.4 billion, leading to a balance sheet €1.47 billion in the red.

The banks shares have dropped from €10 to €3 in a year, though this is “disconnected from the reality of the group,” according to the bank’s president Jean-Marie Sandler. There will be no dividends this year.

The biggest concern is the fact the bank bought a Greek bank, Emporiki, in 2006, which has proved a lead weight.

The bank’s bosses faced a packed hall of shareholders angry over the bank’s dangerous exposure to the Greek crisis.

“I’ve got more than 1,000 shares that aren’t worth anything any more,” said the first speaker from the floor.

Others made emotional statements about the trust they had placed in the bank. “I put all my savings in Crédit Agricole shares, it was like a protective mother to me,” said one. “Let’s go back to our fundamentals – local banking.” Another said: “I trusted the Crédit Agricole because to me, it represented the common sense of the small French farmer.”

Several shareholders demanded that bosses should take cuts in perks and salaries.

Director general Jean-Paul Chifflet argued Emporiki was acquired at a time when “the euro crisis was unimaginable” and southern Europe was thought to have good prospects for growth.

He and Mr Sandler said there would be no salary cuts, as they had been frozen since 2010; they hoped there may be dividends in 2013.

They promised to stop all “speculative” activity and return to the strategy of being a “universal local bank”, and pursue ways to reduce exposure to Greek risk.

“It was more agitated than normal,” one shareholder told Libération. He added the question of what to do with Emporiki was not resolved. “Should we cut our losses? It would not look good – the Crédit Agricole buys a Greek bank and then drops it six years later in the middle of economic crisis. The state would surely not let us do it.”

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