UPDATE 5-Agricole to sell assets, restructure Calyon

(Adds further detail, comments from Fitch and analysts)

By Sudip Kar-Gupta

PARIS, May 15 (Reuters) - Credit Agricole (CAGR.PA: Quote, Profile, Research) pledged 5 billion euros ($7.75 billion) of asset sales and a shake-up of its investment banking arm, axing chief executive Marc Litzler, as the sub-prime crisis spread to France's biggest retail bank.

Confirming the departure of the former high-flyer it once poached from rival Societe Generale (SOGN.PA: Quote, Profile, Research), Credit Agricole SA said it would scale back Litzler's loss-making Calyon division and cut costs.

It also confirmed plans for a 5.9 billion euro rights issue, roughly equal in scale to the 5.5 billion euro emergency funds raised by SocGen in response to the world's largest rogue trading scandal at that bank earlier this year.

Credit Agricole SA, the publicly quoted vehicle of a highly decentralised bank popular with French farmers, had only recently been seen as a candidate to buy all or part of SocGen until the global financial crisis seeped into French banking.

"Credit Agricole has paid the price of this crisis," Chief Executive Georges Pauget told reporters.

Agricole, one of many banks damaged by the global credit crunch, said it had identified around 5 billion euros of potential disposals to be made over 18 months.

Analysts said this could include the bank's 5.6 percent stake in Italian bank Intesa Sanpaolo (ISP.MI: Quote, Profile, Research), which is currently worth some 3 billion euros.