On Thursday, France’s second-biggest listed bank stated that more subordinate costs for troubled loans and growing revenues across business lines increased fourth-quarter results beyond consensus.
The lender told it would offer a new strategic plan for 2025 on June 22 behind underlying net income came in at approximately 5.4 billion euros ($6.17 billion) for 2021, well beyond its 5-billion target for this year.
Other key 2022 targets, like a cost-to-income ratio under 60% and a return on tangible equity of more than 11%, were met, individually, with 2021 figures standing at 57.8% and 13.1%.
The group, which has a policy of spending half of the profits to shareholders, expressed it would propose a 2021 dividend of 1.05 euro per share, including a 20 cents catch-up for the 2019 dividend, which could not be delivered.
The European Central Bank restricted dividend payments amid the coronavirus crisis to beef up lenders’ balance sheets. Nevertheless, with those restrictions lifted, Credit Agricole (OTC: CRARY) plans to add a 20 cent payment to its 2022 dividend to compensate shareholders.
Talking to reporters, Credit Agricole’s CFO Jerome Grivet refused to comment further on the group’s payout policy, presenting any change would be divulged during the presentation of the new strategic plan in June.
European banks are rising shareholder returns
Rebounding economic development and increasing interest rates have prompted other European banks to boost shareholder returns.
Shares in Credit Agricole handled a session high of 14 euros on Wednesday, their highest level after 2018 after bouncing about 150% since the COVID-19 crash in March 2020.
Fourth-quarter profit leaped to 1.428 billion euros from 124 million euros a year earlier when a 778 million goodwill impairment for its Italian operations hit its marks.
Like-for-like cost of risk, reflecting provisions versus bad loans, fell by 34.5% to 328 million euros over the quarter.
French and international retail banking, asset servicing, investment banking, insurances, and asset management all saw double-digit increases in net income in the last three months of 2021.
