Laurentian Bank shares surge six per cent on earnings report
Laurentian Bank of Canada reported a profit of $55.7 million in its fiscal fourth quarter, swinging from a $102.9 million net loss a year ago as revenues rose slightly.
On an adjusted basis, the bank reported earnings of $57.8 million and $1.31 per share in the three months ending Oct. 31, up from $1.06 per share last year. Analysts were expecting $1.24 on average. Revenues were up three per cent to $257.1 million.
For the full fiscal year, Laurentian reported earnings of $226.6 million in 2022 compared to $57.1 million in 2021.
“I am extremely pleased that we exceeded all of our financial targets in this first year of our three-year strategic plan,” said Laurentian Bank president and chief executive Rania Llewellyn in a news release accompanying the results. “Our solid results speak to the strength of our underlying business, our ongoing focus on cost discipline, our prudent approach to credit, and our continued efforts in executing against our plan.”
Higher interest income growth from commercial loans helped drive growth in net interest income, which rose six per cent to $183.8 million for the quarter. The bank's expenses fell by $182.3 million to $174.1 million and its loanloss provisions, or the amount the bank set aside for bad loans, stood at $17.8 million from $24.9 million a year earlier.
National Bank of Canada analyst Gabriel Dechaine attributed the beat to a lower tax rate that offset a pre-tax, pre-provision earnings gain primarily due to increased revenue. He added that the bank's loan growth was largely dominated by commercial loans which more than doubled year-over-year.
Shares of Laurentian traded up more than six per cent at $33.59 in Toronto on Friday.