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Canadian Western Bank profit climbs 9 per cent

A Canadian Western Bank branch in Calgary.


Canadian Western Bank says its profit in the summer quarter rose 9 per cent and its revenue rose 11 per cent compared with the same period last year and improved even more compared with last spring.

The Edmonton-based bank said its net income for the May-July quarter rose to $28.7-million, up 9 per cent from $26.3-million in the year-earlier period and up nearly 33 per cent from $21.58-million in the February-April quarter.

Revenue for the fiscal third quarter was $83.3-million, up 11 per cent from $74.9-million a year earlier and up 13 per cent from $73.7-million in the second quarter ended April 30.

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Earnings per diluted common share fell, however, to 38 cents from 41 cents, as a result of dividends paid on preferred shares issued in March. The bank said it's maintaining its common share dividend at 11 cents.

Based on the current market price, the dividend on CWB's common shares yields 2.5 per cent annually.

CWB said earnings from its bank and trust operations accounted for most of the profit, rising 7 per cent from a year ago to $25.5-million, due to strong loan growth and a bigger gain from the sale of securities.

Net income from insurance operations was a record $3.2-million, up 30 per cent compared to a year earlier.

Larry Pollock, the bank's president and chief executive, said in a statement that CWB is pleased with the third-quarter and year-to-date results given narrower profit margins and a recessionary environment.

"While positive signs are clearly evident, economic uncertainties remain," Mr. Pollock said in a statement.

"Based on our current view, overall credit quality is relatively stable. The level of gross impaired loans will fluctuate as we progress through the current cycle, but we expect actual write-offs will remain within our range of acceptable levels. As expected, net interest margin showed good improvement over the prior quarter and we believe this trend will continue."

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Canadian Western's shares closed Wednesday at $17.60.

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