John Morstad/The Globe and Mail
Laurentian Bank reported Thursday that its third-quarter profits dipped 7.1 per cent to $28.7-million without last year's benefit from the sale of its partial ownership of the Montreal Exchange.
The Montreal-based bank earned $1.08 per diluted share for the period ended July 31, compared to $1.17 a year ago when net income was $30.9-million.
Last year's results included a $11.1-million net gain on the sale of the Montreal Exchange shares, partly offset by an increase in the general allowance for loan losses. Excluding these items, net income increased by 13 per cent.
Return on common shareholders' equity was 11.6 per cent for the third quarter of 2009, compared to 13.4 per cent for the corresponding period in 2008.
Chief executive Rejean Robitaille said measures taken this year to offset the impact of the financial and economic crisis have contributed to the improved adjusted earnings.
Although economic and credit conditions remain challenging, the head of Canada's seventh-largest bank had "excellent loan and deposit growth" while its strong capital and liquidity provide it with financial flexibility.
The bank's revenues increased about 3 per cent to $176.7-million.
The results beat analyst expectations. They had forecast that adjusted earnings would decrease 20 per cent to 88 cents, compared with $1.09 last year, on $162-million in revenues, according to Thomson Reuters.
All of the bank's business segments contributed to the increased profitability during the quarter, led by the real estate and commercial sector which was up 44 per cent from the prior year.
B2B Trust deposit growth slowed from the second quarter but was up 36 per cent from the third quarter of 2008.
Retail and small business segment profits were $9.7-million as most loan categories grew as a result of marketing and sales efforts. Net interest income increase 9 per cent to $112.8-million as a result of higher loan and deposit volumes.
Margins were lower than last year but up from last quarter's low level as competition for retail customers and low interest rates continued to put pressure on margins.
On the Toronto Stock Exchange, Laurentian Bank's shares surged 4.14 per cent, gaining $1.50 to $37.73 in morning trading.