French bank Credit Agricole posted a record 3.07 billion euro (2.58 billion pound) quarterly net loss on Thursday, performing worse than expected due to the cost of shrinking its balance sheet and losses on Greek debt.

The semi-cooperative bank, which is under new management and trying to return to its low-risk retail lending roots, was hit by more than 2 billion euros in quarterly one-off charges that it had already disclosed in December.

Unprecedented cheap funding by the European Central Bank and a debt deal on Greece have calmed financial markets but the outlook is still uncertain, Credit Agricole's chief said.

We think 2012 is going to still be a tense period, Jean-Paul Chifflet told journalists on a conference call. We're hoping that our results will be largely better than in 2011...the months of January and February, in everything that is (capital) markets, have been good.

Credit Agricole shares were down 3.2 pct at 4.85 euros at 1003 GMT. The stock is up 14.9 percent year-to-date, underperforming a 17 percent gain for the STOXX Europe 600 bank index as investor risk appetite returns for European financials.

Although Credit Agricole is less dependent on investment banking than other big European rivals, it has been burned by its purchase of local Greek bank Emporiki and the cost of shuttering risky activities after the 2008 financial crisis.

We hope we're reaching the end of the tunnel (on Greek debt write-downs)...But we're only in mid-February, I'm not sure on the outlook for the Greek economy, CEO Chifflet said.

Credit Agricole does not foresee a Greek exit from the euro zone, Chifflet said, though he added the bank was looking to cut its funding exposure to Emporiki by a variety of means including access to central-bank funding.

Europe's sovereign debt crisis and volatile markets have taken a big bite out of European banks' profits, particularly in bond trading. Deutsche Bank and Credit Suisse ended 2011 with quarterly losses, while Britain's Barclays posted its worst quarter for three years.

Credit Agricole's Chifflet said the bank would cut trader bonuses by 20 percent. Though larger rivals BNP Paribas and Societe Generale have pledged cuts of 50 percent, Credit Agricole says it pays its traders less already.

Also on Thursday, smaller domestic rival Natixis reported a milder-than-forecast 32 percent decline in quarterly profits as it became the latest lender to grapple with weak markets and the euro zone crisis.

Natixis shares were up as much as 7 percent in morning trading, reflecting relief over underlying performance that Nomura analyst John Peace called reasonable versus peers.

Bailed out Franco-Belgian bank Dexia, meanwhile, said it risked going out of business as it posted a 2011 net loss of 11.6 billion euros ($15.4 billion), hit by its break-up and exposure to Greek debt and other toxic assets.

'NEGATIVE SURPRISE'

Credit Agricole's record 3.1 billion-euro net loss was worse than the 2.75 billion-euro average estimate in a Reuters poll of 11 analysts. The bank's revenue fell 4 percent to 4.66 billion, higher than the poll average of 4.54 billion.

This marks its biggest-ever quarterly loss and its first annual loss as a listed entity. Credit Agricole S.A. was floated in 2001 and is still majority-owned by its founding network of deposit-rich and relatively robust regional banks.

Alongside write-downs on the value of its shrinking investment bank and stakes in euro zone lenders, Credit Agricole took a 220 million-euro charge on its Greek debt and a 482 million-euro loss on asset sales in the fourth quarter.

The investment bank, which is bearing the brunt of Credit Agricole's asset sales to cut debt, saw fixed-income and equities revenue fall by around one-third and one-quarter respectively. Its financing business barely broke even.

Credit Agricole's international retail bank also performed poorly, with 325 million euros in fourth-quarter losses at Emporiki and write-downs on stakes held in Spain's Bankinter and Portugal's Banco Espirito Santo.

Another negative surprise, CM-CIC analyst Pierre Chedeville said, adding that the costs of slashing debt and cutting assets were the main reason behind the earnings miss.

Like domestic rival Societe Generale, Credit Agricole, France's third-biggest listed bank, will not pay a 2011 dividend and has also scrapped its 2014 targets.

Its core Tier 1 ratio, a key measure of banks' ability to withstand losses, was 8.6 percent at end-2011, 0.2 percentage points higher year-on-year.

Credit Agricole and Natixis are the last of the country's big banks to report results.

Last week BNP Paribas, the largest, reported better-than-forecast quarterly profits, while Societe Generale forecast a grim 2012 after a loss at its investment bank.

(Editing by Helen Massy-Beresford and Christian Plumb)