August 28, 2014 / 1:48 PM / 4 years ago

Laurentian Bank profit misses estimates due to lower interest income

A sign sits outside the head offices of Laurentian Bank in Montreal, March 19, 2013. REUTERS/Christinne Muschi

(Reuters) - Laurentian Bank of Canada (LB.TO) reported a weaker-than-expected quarterly profit, hurt by fewer high-margin personal loans and lower prepayment penalties on residential mortgage loans.

Laurentian Bank shares were down about 2 percent at C$50.60 on the Toronto Stock Exchange in early trading on Thursday.

Net income rose to C$40.1 million, or C$1.27 per share, in the third quarter ended July 31 from C$27 million, or 86 Canadian cents per share, a year earlier.

Excluding items, the lender earned C$1.35 per share, below the analysts’ average estimate of C$1.40 per share, according to Thomson Reuters I/B/E/S.

Net interest income fell 2 percent to C$141.2 million, while provision for loan losses, the amount of money the bank sets aside to cover bad loans, increased by C$1.5 million to C$10.5 million.

Montreal-based Laurentian Bank’s results contrast with those of its larger peers such as Toronto-Dominion Bank (TD.TO), Canadian Imperial Bank of Commerce (CM.TO) and National Bank of Canada (NA.TO), who reported better-than-expected quarterly earnings.

Laurentian Bank shares had risen about 10 percent this year through Wednesday’s close.

Reporting by Ashutosh Pandey in Bangalore

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