Credit Agricole to raise $9.1 bln after writedown

By Sudip Kar-Gupta

PARIS (Reuters) - France's biggest retail bank Credit Agricole (CAGR.PA: Quote, Profile, Research, Stock Buzz) sought 5.9 billion euros ($9.1 billion) from its shareholders to shore up its capital after new writedowns at its Calyon investment bank, hitting its shares.

Agricole's confirmation of the planned rights issue and a 1.2 billion euro Calyon writedown that will hit first-quarter profits, came after a banking industry source said Calyon Chief Executive Marc Litzler might be on his way out of the company.

Shares in Agricole were down 5.5 percent at 19.60 euros in mid-afternoon trade, the biggest loser on France's benchmark CAC-40 index .FCHI. The CAC-40 was up 0.8 percent while the DJ Stoxx European bank sector fell 0.1 percent.

"It's very, very bad. It's one loss too many," said Stratege Finance fund manager Valerie Cazaban.

Agricole said it expected Calyon to take the writedown during the first quarter, due to the credit crunch.

This would lead to a net profit of 892 million euros for the banking group -- down 66 percent from last year and worse than many analysts' forecasts.

Agricole formally publishes first-quarter numbers on Thursday. In March, it reported a fourth-quarter net loss of 857 million euros.

Investment bank Dresdner cut its rating on Agricole to "reduce" from "hold" and said the bank remained in its "unattractive" portfolio. It said Agricole's capital increase could dilute its 2009 earnings per share by 12-22 percent.  Continued...