(Reuters) - Higher costs pushed Laurentian Bank of Canada (LB.TO) to a 16 percent drop in quarterly profit, and the company’s shares were down by more than 2 percent on Wednesday in reaction.
Laurentian, Canada’s seventh-largest bank by assets, earned C$31.0 million ($31.0 million), or C$1.16 a share, in its first quarter, compared with C$36.9 million, or C$1.41 per share, a year earlier.
Excluding integration costs stemming from the acquisition of the MRS financial-management companies in September, the bank earned C$1.24 a share.
Both measures fell short of analysts’ expectations of a profit of C$1.26 a share.
Total revenue rose to C$193.7 million from C$182.4 million, helped by loan growth, the bank said. But profits were hurt by higher non-interest expenses and income taxes.
Montreal-based Laurentian bought MRS - a group of four financial-management firms with about C$850 million in assets - from IGM Financial (IGM.TO).
The company is the sixth Canadian bank to report first-quarter results and only the second to miss analyst estimates.
Analysts have predicted a slowdown in Canadian retail banking growth as already heavily indebted consumers start to borrow less and as interest margins narrow. They say, however, that slower growth could be more of a factor in bank results later in the year.
Laurentian’s shares were down C$1.09, or 2.4 percent, at C$43.96 on the Toronto Stock Exchange on Wednesday afternoon, the weakest stock in the S&P/TSX financials index .SPTTFS.
Reporting By Cameron French in Toronto and Bhaswati Mukhopadhyay in Bangalore Editing by Peter Galloway