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Crédit Agricole to take €600M impairment charge on LCL unit

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Crédit Agricole to take €600M impairment charge on LCL unit

Crédit Agricole SA will book a roughly €600 million impairment charge on the goodwill recognized on retail unit LCL.

The impairment charge will be booked in the fourth quarter and directly affect net income group share, although the French bank said it would not affect either the solvency or liquidity of itself or Crédit Agricole Group.

The charge was taken to reflect "the current macroeconomic and financial environment in which LCL operates" and the effect thereof on the value of the business. Crédit Agricole noted that those conditions do not affect the group financials as a whole.

It also reiterated its 2022 targets for LCL of a cost-to-income ratio excluding the Single Resolution Fund of less than 66% and a return on notional equity of greater than 12.5%, and for Crédit Agricole SA of a return on tangible equity of more than 11%, a cost-to-income ratio, excluding the Single Resolution Fund, of less than 60%, and a common equity Tier 1 ratio of 11% for Crédit Agricole SA and greater than 16% for Crédit Agricole Group.