French bank Credit Agricole said that its profits for 2008 fell by 74.7 percent over the previous year, to 1.024 billion Euro (USD 1.28 billion.) The sharp downturn was primarily caused by risk provision write-offs of 3.2 billion Euro, up nearly 70 percent over 2007, and Managing Director Georges Pauget said he expects the troubles to continue through 2010. "This large increase reflects the deterioration of the global economic environment," Credit Agricole said in a statement.

The risk provisions were particularly marked in the banks investment and finance operations, where they totaled 1.31 billion Euro because of the crises in the global finance and real estate sectors. The effects of these crises were particularly felt at the end of the year, with Credit Agricole registering a loss of 309 million Euro in the fourth quarter of 2008. Analysts had expected a slight profit for the quarter. The bank was also affected by the weak performance of its Greek subsidiary Emporiki, which cost Credit Agricole 616 million Euro in profits for the year, 527 million Euro in the fourth quarter alone. To keep Emporiki from failing, shareholders approved a capital increase of 850 million Euro for the Greek bank earlier this year. Credit Agricoles turnover for the year was down 4.8 percent, to just under 16 billion Euro. Pauget said that the bank "has demonstrated its ability to take the measure of the crisis in adapting very early its plan of action."

However, investors were undecided. After the news, Credit Agricole shares were virtually unchanged, at 7.09 Euro. Over the past 52 weeks, the banks shares had lost nearly 60 percent of their value and there was little to cheer about as Pauget said, "We expect that the crisis wont end until the second part of 2010."

Agricole took control of Emporiki in 2006 in a deal valuing the Athens-based lender at 3.3 billion Euro, hoping to boost the French banks presence in the Balkans as part of an expansion drive to generate more revenue from outside its domestic market. The losses at Emporiki combined with the current harsh environment for Agricoles investment bank increased the cost of risk by 36 percent to 1.6 billion Euro in the fourth quarter of 2008, which pressured the net result, the French bank said.

Agricole in 2008 raised 5.8 billion Euro to slow losses at its corporate and investment bank, which it subsequently downsized, marking a return to the groups origins in retail banking. "Much of the negative market impact on asset management and corporate and investment banking was offset by a solid performance in retail banking in our domestic markets," Agricole said.