Crédit Agricole has reaffirmed its commitment
to Emporiki following a wide-ranging internal review, during which
France’s largest bank considered selling or merging its Greek-based
subsidiary. Conceding that it had made mistakes with its Greek unit
in the past, Crédit Agricole said it would take a €500 million
($743.1 million) impairment charge in its third-quarter results in
respect of Emporiki, in which it holds an 82 percent stake.

Emporiki posted a first half loss of €358
million and expects to post a pre-tax loss for the full year of
around €550 million, which it aims to reduce to around €300 million
to €350 million in 2010.

In an attempt to return to profitability by
2011, the Greek lender released a four-year restructuring and
development plan, in terms of which Crédit Agricole will inject €1
billion in capital to enhance Emporiki’s Tier 1 ratio. The plan
commits the bank to cut its cost-income ratio to 70 percent in 2011
and 50 percent by 2013 having hit 92.7 percent at the end of the
first half this year.

Headcount is expected to fall 20 percent from
the 2008 figure of 5,500 by 2011, while the branch network is to
shrink from 372 to 337 over the same period.

Emporiki has said it will up its game with
regard to product development and cross-sell, targeting a
cross-sell ratio closer to its rivals – currently 1.5 products per
client at Emporiki, versus 1.8 for competitors. It is forecasting
loan growth of 7 percent per annum to 2013 while deposit growth of
5 percent is targeted; if achieved the bank would post a
loan-to-deposit ratio of around 138 percent by 2013.

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