* CASA says Q4 net income down to 291 mln euros
* Writedown of 491 million euros on retail bank
* To reduce holding in Amundi to 70 percent
(Updates with deputy CEO comments)
By Maya Nikolaeva and Julien Ponthus
PARIS, Feb 15 Credit Agricole exceeded
market forecasts on Wednesday, despite a 491 million euro ($519
million) writedown causing a sharp fall in the French bank's
fourth quarter profit.
Shares in Credit Agricole, which said the writedown on the
value of its French retail banking business was due to low
interest rates, rose 3.3 percent in early trading as fourth
quarter net income of 291 million euros beat estimates.
The bank is the latest in France to report falling retail
banking revenues, as lenders grapple with mortgage loan
renegotiations and declining fee income.
Analysts had estimated Credit Agricole's net income of 254
million euros in a Reuters poll, and while the result beat their
forecasts, it was down from 882 million euros a year ago.
Chief Executive Philippe Brassac said the LCL retail bank
faced the same problems as others.
"There is nothing specific to LCL when compared to retail
(banking) in France," Brassac told journalists.
Efforts to maintain and develop Credit Agricole's customer
base in a highly competitive environment would pay off in coming
quarters, especially given the very slow but gradual rise in
interest rates, Brassac added.
"The point to highlight this quarter is good underlying
performance of LCL, which was an ongoing concern for some
investors," analysts at Jefferies said in a note.
LCL's underlying revenue fell 1.1 percent over the fourth
quarter, performing slightly better than its peers, while cost
cuts helped drive net income up 35 percent to 160 million euros.
But for 2016 as a whole, LCL's revenue fell 14 percent,
while French retail revenue was down 3 percent at BNP Paribas
and 3.5 percent lower at Societe Generale.
Credit Agricole operates a wide range of businesses
including asset management, specialised financing and trading,
which helped soften the blow from the pressures on its
traditional retail banking that are set to linger in 2017.
The bank overhauled its complicated ownership structure last
year, putting more capital in its listed arm and allowing it to
reassure investors over all-cash dividends.
It has been focusing on its two key markets, France and
Italy, and has been limiting its foreign expansion to its asset
management arm Amundi, which is buying rival Pioneer
Investments from UniCredit.
Credit Agricole Group, the parent of the listed entity, said
that as part of Amundi's rights issue to finance the Pioneer
purchase, it was cutting its holding to 70 from 75.7 percent.
The bank's asset gathering division, that includes asset
management, insurance and wealth management, reported a 35
percent rise in net income over the fourth quarter, while net
profits more than doubled at its investment banking arm.
Overall, group revenues rose 7 percent to 4.58 billion
euros, above the poll average of 4.36 billion.
($1 = 0.9459 euros)
(Editing by Sudip Kar-Gupta and Alexander Smith)