Canadian banks are struggling to grow profits: Portfolio manager
Lower expenses and higher revenue helped boost Laurentian Bank of Canada's profits to $55.7 million for the fourth quarter.
The Montreal-based bank said Friday the earnings worked out to $1.26 per share for the quarter ending Oct. 31, compared with a loss of $2.39 per share a year earlier when it took impairment and restructuring charges of $189.4 million or $3.40 per share.
The charges last year were related to a strategic review of the bank's operations and a writedown of its personal banking segment as the bank embarked on a turnaround plan that chief executive Rania Llewellyn said is going well.
“I am extremely pleased that we exceeded all of our financial targets in this first year of our three-year strategic plan,” she said in a statement.
Llewellyn said the results speak in part to the bank's focus on cost discipline, with expenses down from last year when it took the charges, while adjusted non-interest expenses were up four per cent from last year but down two per cent from the third quarter.
Adjusted net income was $57.8 million and adjusted diluted earnings per share were $1.31 compared with $47.8 million and $1.06 a year prior.
Analysts on average had expected adjusted diluted earnings of $1.24 cents per share and $54.4 in net income, according to financial markets data firm Refinitiv.
Scotiabank analyst Meny Grauman said the earnings beat was led by expenses that were lower than expected, with salaries and benefits down 10 per cent from the third quarter, along with lower taxes.
He said the results were mixed as the bank's revenue also came lower than expected and margins slipped.
Revenue came in at $257.1 million, up from $250.4 million last year, while its provision for credit losses totalled $17.8 million compared with $24.9 million a year prior.
For the fiscal year as a whole, the bank reported a net income of $226.6 million, and total revenue of $1.03 billion, up from a net income of $57.1 million on $1 billion in revenue last year.
This report by The Canadian Press was first published Dec. 9, 2022.