Laurentian Bank profit falls but tops estimates
(Reuters) - Laurentian Bank of Canada (LB.TO: Quote) reported a 12 percent fall in fourth-quarter profit, but the result topped estimates and investors drove its shares higher on Wednesday.
Laurentian, Canada's No. 7 bank by assets, also raised its quarterly dividend for the second time this year.
The bank earned C$28.6 million ($28.3 million), or C$1.06 per share, for the fourth quarter, ended October 31. That was down from a year-before profit of C$32.5 million, or C$1.24 a share.
Excluding integration costs from its recent acquisition of the MRS group of asset management companies, the bank earned C$1.31 a share. That topped analysts' expectations of a C$1.20 a share profit.
National Bank Financial analyst Shubha Khan said the profit beat was due largely to lower loan costs than expected.
"The results were quite positive in the context of a bank that we feel faces tougher constraints on loan growth than peers," he said in a note.
Montreal-based Laurentian, which operates almost exclusively in the province of Quebec, took an C$8.2 million charge related to its September acquisition of MRS Companies - a group of four financial management firms with about C$850 million in assets - from IGM Financial (IGM.TO: Quote).
Revenue fell 1.4 percent to C$187.4 million. For the full year, revenue rose 2 percent, missing the bank's target of at least 5 percent growth.
Loan volumes grew by 8 percent in the quarter, but interest margins narrowed, meaning the bank earned less on the loans. Continued...