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Laurentian Bank of Canada net income $40.5 million

Staff writer |
Laurentian Bank of Canada reported adjusted net income of $40.5 million or $1.32 diluted per share for the first quarter of 2015, up 3% and 2% respectively.

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This compared with $39.3 million or $1.29 diluted per share for the same period in 2014. Adjusted return on common shareholders' equity was 11.3% for the first quarter of 2015, compared with 11.7% for the first quarter of 2014.

Adjusting items for the first quarter of 2015 include a charge of $3.6 million after tax or $0.12 per share, impacting reported net income, related to the recent announcement of the Bank's President and Chief Executive Officer's retirement.

On a reported basis, net income totalled $35.8 million or $1.15 diluted per share for the first quarter of 2015, compared with $35.5 million or $1.16 diluted per share for the first quarter of 2014. Also on a reported basis, return on common shareholders' equity was 9.9% for the first quarter of 2015, compared with 10.5% for the first quarter of 2014.

The Personal and Commercial segment, which is comprised of Retail Services and Business Services groups, performed well again this quarter, posting a 9% net income growth over the first quarter of 2014.

The development of the Business Services activities continued to be the main growth engine during the quarter. With a 20% increase in commercial loans and 11% in commercial mortgage loans year-over-year, the total value of the business portfolios is $6.2 billion today, representing 22% of the Bank's total loans. Over the past two years - since the first quarter of 2013 - these portfolios have grown by $1.4 billion, or 28%.

Business Services' activities are all the more productive for the Bank given the continued strong credit quality of its portfolios. The Bank's strategy of operating in specific market niches only - which were targeted notably on the basis of borrower quality - has proven to be a judicious one.

Moreover, these targeted segments have strong growth potential for the Bank namely as a result of the high level of expertise required to serve these markets. Such specialized niches include energy, manufacturing, health care, daycares and equipment financing.

With the RRSP season in full swing, the Retail Services team is taking advantage of this time to review deposit and investment strategies with their clients.

The solid base of clients who entrust their savings to the Bank constitutes an important asset for the Bank. Testifying to the effectiveness of its investment solutions, the Bank's mutual fund revenues continued to grow at the rate of 24% year-over-year.

For its part, B2B Bank pursued the development of its mortgage loan market. Thanks to its comprehensive range of products - one of the most complete lines available to mortgage brokers - B2B Bank's offerings are able to effectively meet the varied needs of these brokers' clients, including the demand for alternative mortgage solutions.

Aside from the quality of its other offerings, such as investment loans, high-interest accounts and other investment vehicles, B2B Bank's success also rests on its unique business model, which concentrates exclusively on the financial advisor and broker market.

Finally, with close to $3 billion of assets under administration, the Laurentian Bank Securities and Capital Markets business segment is at a scale that enables it to effectively compete and serves as a solid complement to the Bank's operations.


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