Credit Agricole Earnings: Investment Banking Bucking the Trend; Degroof Deal Looks Expensive

No-moat Credit Agricole posted very strong results for the second quarter of 2023, with attributable net income of EUR 2 billion, 25% higher than a year earlier and materially ahead of the EUR 1.4 billion company-compiled consensus. Credit Agricole's investment banking business performed much better than anticipated and bucked the declining revenue trend of its peers. Credit Agricole is now on track to reach its EUR 6 billion net income target two years ahead of schedule. Credit Agricole's management did not provide detailed and updated guidance. We understand this. Investment banking revenue is at an all-time high for Credit Agricole and, in a low-volatility environment, could be under pressure in the future. Management indicated that it expects the recovery of French retail net interest margins to only start in the second half of fiscal 2024. We maintain our EUR 14.50 per-share fair value estimate.