Credit Agricole imight sell shares in nearly 40 local banks

French Credit Agricole is examining options for the sale of its shares in nearly 40 local regional banks. The move is part of the financial group attempts to strengthen their capital buffers, writes Bloomberg.

The deal would improve "the financial flexibility of Credit Agricole, as accelerate the pace of capital accumulation and allow the bank to repay provided extraordinary cash dividend this year, reported by the institution. The stock prices of individual regional banks may vary, but the whole plan subject to discussions with the supervisors, it said in the message.

Reformulation relationship

Credit Agricole is looking for ways to reorganize their financial relations with regional banks - they have a majority stake in the credit institution, and she in turn also holds part of their shares. The aim is to free up capital to be able to meet more stringent regulations for the sector, says Bloomberg. The new CEO of the group Philip Brasak, who took office in May, focuses its efforts on its activities in France and on the restructuring of its investment banking after giving up its ambitions for global expansion, its purpose is to enhance profits in the third-largest bank in the country.

"Banks with exposure to the periphery are under pressure to improve its capital levels," says Arno Skarpachi of Paris company asset management Montaigne Capital. "Regional banks are military coffers of Credit Agricole. The fundraising from the places where they exist, the easiest way to proceed," it notes.