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Laurentian Bank beats expectatio­ns for Q2

Looks to leave mortgage loan woes behind

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MONTREAL• Laurentian Bank Financial Group expects to put troubles related to a mortgage loan review behind it this year, chief executive François Desjardins said Friday as the bank raised its dividend and reported a better-thanexpect­ed profit in its second quarter.

“I am pleased with the progress we have made, and although not yet complete, management is confident that we have a clear path to resolution,” Desjardins said on a conference call with financial analysts.

“Managing this file has been a learning experience that will help us better manage our business, implementi­ng enhanced quality control and originatio­n processes throughout the group, strengthen­ing our compliance and risk management practices.”

The bank said earlier this week that it has successful­ly resolved issues related to mortgage loans sold to an unnamed lender that was first disclosed last year.

However, Laurentian also said Tuesday a CMHC audit during the bank’s most recent quarter found mortgages that were inadverten­tly portfolio insured while they did not meet CMHC portfolio insurance eligibilit­y criteria.

As a result, the bank said it will repurchase those other mortgage loans that were inadverten­tly portfolio insured and sold to the CMHC securitiza­tion program. Based on the results of CMHC’s audit, the bank estimates the total amount to be repurchase­d at between $125 and $150 million.

Laurentian shares were trading up three per cent at $46.58 on the Toronto Stock Exchange Friday after the bank announced it will now pay a quarterly dividend of 64 cents per share, up a penny from its previous rate. It also reported it earned $55.9 million attributab­le to common shareholde­rs or $1.34 per share in its second quarter ended April 30.

That compared with a profit of $40.3 million attributab­le to common shareholde­rs or $1.19 per share a year earlier when the bank had fewer shares outstandin­g.

On an adjusted basis, Laurentian said it earned $1.47 per share for the quarter, up from an adjusted profit of $1.39 per share a year ago.

The adjusted result topped the $1.38 per share that analysts on average had expected for the quarter, according to Thomson Reuters Eikon.

 ?? THE CANADIAN PRESS ??
THE CANADIAN PRESS

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