Crédit Agricole SA's investment bank is increasingly challenging and winning business from the major U.S. investment banks, which is driving revenues at the unit up to a "new normal," said Jérôme Grivet, deputy general manager in charge of finance.

CASA's corporate and investment banking business enjoyed a record quarter in the three months to June 30, posting underlying revenues of €1.58 billion, up 22% year over year and more than 10% quarter over quarter. The corporate and investment bank's performance surpassed that of the equivalent divisions of listed French peers BNP Paribas SA and Société Générale SA, which enjoyed similarly strong second quarters, but was lower than their first three months of 2022.

The reliability of CASA's investment bank in recent years, particularly during the challenges posed by the COVID-19 pandemic, made its customers consider the business for other products and services that have traditionally been dominated by major U.S. investment banks such as JPMorgan Chase & Co., The Goldman Sachs Group Inc. and Morgan Stanley, said Grivet.

"More and more when [customers] want to engage in hedging operations, when they want to engage in new market financing operations, they tend not necessarily to talk only to the big American [investment banks], but also they tend to talk to us," said Grivet. "We have a growing capacity of being relevant in these market operations."

This new business is encouraging CASA to adjust the quarterly revenue expectations for its investment bank. "The new normal is probably not necessarily €1.5 billion a quarter, but it's better than the €1.2 billion a quarter that we had before," said Grivet.

Global investment banks enjoyed a strong first half to the year as a spike in volatility across markets provided opportunities to traders. Surging inflation, the direction of interest rates and global growth, and the impact of Russia's invasion of Ukraine have generated uncertainty among investors since the beginning of 2022.

CASA's investment bank generated most of its growth from capital markets activity, which rose 36.9% year over year to €676 million. Fixed income, currency and commodity trading drove most of the gain, rising 36.9% year over year due to "high volatility and customer coverage needs," its earnings presentation said.

"Commercial banking and other" was again the investment bank's second-largest source of income, growing revenues by 21.8% to €515 million. Structured finance and investment banking made up the remainder of the unit's revenues at €250 million and €138 million, respectively.

The record performance at CASA's investment bank helped the lender post revenues of €6.19 billion, up 6.2% year over year. Costs also increased in the quarter by 5.2% from the same period in 2022, while cost of risk fell 20.4% year over year to €203 million. The results led to €1.91 billion in underlying net income for CASA, up 18.1% year over year.