Europe's banks showed the scars of the financial crisis on Thursday as Royal Bank of Scotland posted a big loss as bad debts jumped and Credit Agricole was hit by losses in Greece, but both said prospects are brighter for this year.
RBS, 84 percent owned by the UK government after a series of bailouts during the crisis, posted a 6.2 billion pounds ($9.5 billion) loss, the largest in Europe for 2009, as bad debts almost doubled to 13.9 billion pounds.
But the bank said impairments had peaked and its investment bank arm GBM made a hefty profit, sending its shares 7.7 percent higher by 1019 GMT.
"The results send a lot of positive signals… impairment trends look better than I generally expected," analyst Joseph Dickerson at Execution said. "GBM looks strong relative to most peers, with the exception of Barclays." ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Click here for a graphic on RBS's profit and share price: http://graphics.thomsonreuters.com/0210/UK_RBS0210.gif ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
France's biggest retail bank Credit Agricole reported a lower-than-expected fourth-quarter profit as earnings were hit by losses in Greece, but it also said it made a good start to 2010, helping its shares 4.2 percent higher by 1019 GMT.
Agricole's net profit rose to 433 million euros ($587 million), swinging from a loss a year ago but almost 10 percent short of expectations due to losses at its Greek bank Emporiki.
Emporiki and other Greek banks have been hit by the country's economic woes and fiscal deficit. Emporiki made a 2009 loss of 583 million euros, but Agricole said it had no plans to sell the division.
German lender Deutsche Postbank said lower loan loss provisions and reduced writedowns on toxic assets will help it achieve a pretax profit in 2010 as it unveiled a pretax loss for 2009.
Germany's largest retail bank by number of customers showed a near 400 million euro loss for 2009 after a big trading loss. It said it expects the level of provisions for problem loans to decline in the quarters ahead, however, after last week announcing a more aggressive approach toward booking losses.
"HARD SLOG"
RBS Chief Executive Stephen Hester acknowledged 2010 will be "a year of hard slog" and said attracting and retaining its best staff was the biggest problem he faced as he is under even more pressure than rivals to clamp down on payouts.
"We were treading an unenviable tightrope walk," Hester said in regard to 2009 bonuses, which totaled 1.3 billion pounds. "We believe that in the context of the industry in which we operate we have been restrained and responsible."
The bank is restructuring and making progress on asset sales forced on it by European competition authorities.
Its payment processing business WorldPay has attracted "considerable buyer interest" but the sale of over 300 branches is complex and not expected until 2011, it said.
Agricole has also been restructuring and trimming back much of its investment banking activities, and Natixis is also rebuilding after being hit hard during the crisis. It reported a better-than-expected fourth-quarter profit of 748 million euros and pledged to cut over 200 million euros in costs as part of a four-year turnaround plan.
Natixis shares added 4.3 percent and Deutsche Postbank was flat by 1019 GMT, alongside a 0.9 percent rise by the broader DJ Stoxx European bank index.
