Credit Agricole reported a two-fold increase in quarterly profit on Thursday, as an improving economy prompted it to set aside less funds to cover bad loans, although shares fell as the French lender lagged rivals in corporate and investment banking.
Unprecedented government support across Europe has helped borrowers keep repayments despite the difficulties caused by the health crisis, allowing banks to shield profits and lower provisions.
Credit Agricole, France's second-largest listed bank, said its net income rose to 1.97 billion euros in the first quarter from 954 million euros a year earlier.
Its cost of risk - an indicator of provisions against loan loss - was down by 66.8%, while revenue rose 18.8%.
The corporate and investment banking business was a sore spot however, as revenue fell 13.7% in the quarter, led by a 28.3% drop in fixed income, currency and commodities trading on lower volatility in the market.
That compares with a 24.5% gain in CIB revenues at the Societe Generale and 9.9% drop at BNP Paribas.
It's not as good as it was said by a Paris trader.
Shares in the Credit Agricole reversed gains to trade about 1% lower at 0841 GMT.
Asked about the outlook of Provisions, Credit Agricole Chief Executive Philippe Brassac told reporters he would be confident for the second half, but declined to provide an estimate.
It does it efficiently. This gives a safer risk paradigm for banks, Brassac said.
In the second quarter, the Euro zone economy grew faster than expected, emerging from a pandemic-induced recession, while the easing of coronavirus restrictions drove inflation past the European Central Bank's 2% target in July.
Compared with the same period a year earlier, when lockdowns brought economic activity near to a standstill, GDP jumped 13.7%. In France, an initial forecast by the national statistics office grew last week showed the economy grew 0.9% in the quarter.
Credit Agricole said in the second quarter it had booked a 258 million euros extraordinary gain on badwill from the acquisition of Italian lender Creval earlier this year.
The lender also said that it had applied to the ECB for a fourth quarter repurchase of shares with up to 500 million euros.
Last month, the European Central Bank said it would lift restrictions on dividend and share buybacks into September, withdrawing a crisis measure which forced banks to retain capital during the pandemic.