Weighed down in particular by the computer failure that occurred at the end of September, the end-of-year financial performance revealed Thursday morning by the Laurentian Bank turned out to be lower than expected.
Adjusted profit per share generated for August, September and October was $1 compared to analysts’ expectations of $1.16. Costs related to handling the outage had a negative impact of 9 cents on adjusted earnings per share.
A year ago, adjusted earnings per share reached $1.31. The bank thus generated an adjusted net profit of 44.7 million for the quarter, while it stood at 57.8 million a year ago.
Revenues decreased by 9.7 million to 247 million compared to the same period last year. Analysts expected 262 million.
“We are currently working to streamline the bank’s activities and thoroughly review our strategic plan in order to focus on serving our clients and remaining a solid Quebec institution,” comments the new president and CEO, Éric Provost.
Laurentienne has been directed by Éric Provost since the beginning of October. He was called in to replace Rania Llewellyn. The leadership change came as a central system outage affected operations and shortly after the bank announced the conclusion of a review of its strategic options, ruling out a sale.
The bank had indicated that the outage occurred during a planned IT maintenance operation.
The bank’s management also claims to have started to simplify its organizational structure in December. The bank therefore plans to record a restructuring charge of 6.5 million for the current quarter which will end at the end of January.
The bank estimates that the measures taken will generate recurring savings of almost 8 million on an annual basis.
“At first glance, the end-of-year quarter was very difficult for Laurentian, which did not meet expectations on several fronts,” comments analyst Mike Rizvanovic of the Keefe, Bruyette firm.
Laurentian is keeping its quarterly dividend unchanged while Mike Rizvanovic expected the dividend to be increased.
The fourth quarter results also include a restructuring charge and a strategic review charge totaling $15.9 million.
