Laurentian Bank profit falls as costs, provisions rise
By Cameron French
TORONTO (Reuters) - Laurentian Bank of Canada (LB.TO: Quote), the country's seventh-largest bank by assets, reported a 6 percent fall in quarterly profit on Friday as higher operating and integration costs stemming from recent acquisitions offset higher revenue.
Shares of Montreal-based Laurentian, which operates almost exclusively in the province of Quebec, were down 0.9 percent after the results were released.
Net profit for Laurentian's fiscal third quarter, ended July 31, fell to C$28.3 million ($26.9 million), or 91 Canadian cents a share, from C$30.0 million, or C$1.06 a share, a year earlier.
Excluding transaction and integration costs, Laurentian earned C$1.31 a share, falling just short of the profit of C$1.33 a share expected by analysts, according to Thomson Reuters I/B/E/S.
National Bank Financial analyst Shubha Khan said in a note the profit miss was largely due to higher than expected non-interest expenses, which jumped 17 percent to C$175 million.
The bank said the rise in expenses was due to higher operating expenses at AGF Trust, which Laurentian acquired last year, as well as higher transaction and integration costs related to both AGF and the 2011 acquisition of the MRS companies, a group of four financial management firms that Laurentian bought in 2011.
The higher expenses largely offset a 14 percent jump in revenue, which came in at C$221 million, driven by the AGF Trust acquisition.
Also eating into profit were higher provisions for bad loans, up 20 percent at C$9 million. Continued...