Laurentian Bank’s profits fell by nearly 20% during the months of February, March and April, but profitability nevertheless exceeded analysts’ forecasts, while Capital Markets activities were streamlined.
The bank’s quarterly profits fell 17% to 49 million. The profits of the financial institution had reached 60 million a year ago.
Adjusted to exclude certain items, earnings per share for the quarter ended a month ago came to $1.16. Analysts were expecting $1.12 per share.
Provisions for loan losses increased to 16.2 million for the quarter. They stood at 13 million a year earlier.
The bank’s quarterly dividend is also increased by 2% to 47 cents per share.
A key positive highlighted by Scotia analyst Meny Grauman is the increase in margins quarter-over-quarter for the first time since the first quarter of fiscal 2022.
Partly in an effort to focus its efforts on its “specialties” and due to the “adverse financial environment”, Laurentian’s management is streamlining its capital markets activities.
“This decision is part of our commitment to carry out focused and concerted activities in essential areas, aligning with the rest of the bank’s activities,” management said.
Management maintains that the reorganization affects “less than 20 positions” and that the jobs affected are distributed equally in Quebec and Ontario.
The bank is thus reducing its securities sales, trading and research activities and is specifying that it will retain its capabilities in equity management, advice, and mergers and acquisitions.
The capital markets division is one of the bank’s three business sectors along with retail banking and corporate services.
CEO Rania Llewellyn explained on a conference call that the announced streamlining has no impact on revenue. “We will continue to focus on our strengths. Should conditions change in the market and we see opportunities to grow again in areas where we can compete to win, we will act accordingly. »
She adds that the reorganization is hitting areas that are experiencing a “significant” downturn.
“Despite this cost initiative, Laurentian expects overall expenses to remain at their current level due to salary inflation and technology-related expenses,” the analyst said. Gabriel Dechaine of the National Bank.
Laurentian Bank shares rose 4.5% on Thursday to close at $31.94 on the Toronto Stock Exchange.
