Calyon, the investment banking subsidiary of Crédit Agricole, has relied on aggressive cost-cutting to improve profits in the first half of this year - against a backdrop of falling revenues and a poor performance in its capital markets division.

The firm's first-half net profits increased to €502m ($606m) - a rise of nearly 20% on the same period in 2003. The improved performance came in spite of deteriorating market conditions and stemmed largely from a sharp fall in risk-related costs and cost-cutting from the merger of the investment banking arms of Crédit Lyonnais and Crédit Agricole.