Credit Agricole reports profit plunge on BES bank collapse

French bank Credit Agricole SA on Tuesday said the collapse of Portuguese lender BES had slashed its second-quarter profits, and warned that it faces a US probe for possible sanctions-busting. But the bank, one of the biggest in Europe by capitalisation, reported a strong underlying performance and its shares surged 5.74 per cent to 10.88 euros. Credit Agricole SA (CASA) said net profit for the three months through June slumped to 17 million euros ($23 million) from 696 million euros a year ago after it wrote off its stake in Banco Espirito Santo. The group said it had been deceived by the family behind the Espirito Santo companies, and would back any legal action by a new management team. This was a second such blow for Credit Agricole: two years ago during the Greek debt crisis it lost a total of 8.7 billion euros on its investment in Greek bank Emporiki. Portugal narrowly averted a national disaster and a fresh eurozone crisis on Monday by launching a new bank as part of a rescue for BES totalling nearly 5.0 billion euros. CASA now deemed its 14.6-per cent share in BES to be worthless, and its total costs from the collapse to be 708 million euros. Of that, the bank said 502 million euros came from losses at BES and 206 million euros from asset write-downs, according to AFP.