Credit Agricole Group said the collapse of Portuguese lender Banco Espírito Santo (BES), in which it has a 14.6% stake, had slashed its second-quarter profits by 97.5% to EUR17 million.
The French banking giant took a EUR708 million hit from its stake in BES, which reported a record EUR3.49 billion second-quarter loss.
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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.
"Today the group (BES) must deal with the issues specific to the Espirito Santo family and which took place outside the sphere of the bank’s corporate governance and which were unknown to us," Credit Agricole CEO Jean-Paul Chifflet said.
"We can only regret having been misled by the family with which Credit Agricole was trying to create a true partnership to build the biggest private bank in Portugal."
The group’s quarterly revenue fell 6.1% to EUR3.934 billion.
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