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Credit Agricole reserves EUR 195 mln against probable total loss of capital of Ukrainian subsidiary due to war

KYIV. May 6 (Interfax-Ukraine) – In connection with the war in Ukraine in the first quarter of 2022, the French bank Credit Agricole SA reserved a probable risk of a complete loss of capital of its Ukrainian subsidiary Credit Agricole Bank (Kyiv) – EUR 195 million.

The bank’s liquidity position remains strong and local provisions of EUR 20 million have been created for doubtful loans. The Group has also created a capital risk reserve of EUR 195 million, which was classified as a separate item, the bank said in a quarterly report.

The document states that Credit Agricole Bank provides material and financial support to employees and their families, ensures the continuity of basic banking services for customers, two-thirds of branches operate in its network, and the banking mobile application is among the most popular.

With regard to Russia, where the Group is also represented by a subsidiary bank, Credit Agricole indicates that since the beginning of the war in Ukraine, any new financing of Russian business and all commercial activities in this country have been stopped.

In the first quarter of 2022, the French bank created EUR 389 million in reserves for risks related to Russia, but there is no risk of capital loss among them: the bank reserved EUR 346 million due to the downgrade of the Russian Federation, which affected the corporate investment business, and another EUR 43 million – to cover risks in the Russian business segment.

Net profit of Credit Agricole SA in the first quarter of 2022 amounted to EUR 552 million compared to EUR 1.05 billion in 2021, and revenue grew by 7.6%, to EUR 5.9 billion.

The Group has reaffirmed the reliability and consistency of its model through its ability to adapt to crisis conditions and will present its medium- and long-term goals on June 22 in response to new challenges of social change, the report says.

As of March 1, 2022, Credit Agricole Bank ranked tenth among 69 Ukrainian banks in terms of assets (UAH 62.66 billion). Its own capital as of that date, according to information on the NBU website, was UAH 6.33 billion, net profit for the first two months of this year was UAH 204.6 million.