May 7, 2009 / 11:43 AM / in 8 years

UPDATE 1-Equitable Group Q1 profit up on mortgage fundings

* Q1 profit up 23 pct

* Mortgage fundings up 77.5 pct

* Net interest margin compression to remain a factor in Q2

May 7 (Reuters) -Canadian mortgage lender Equitable Group Inc ETC.TO posted a 23 percent rise in first-quarter net income, helped by a jump in mortgage fundings.

“While compression in net interest margin will remain a factor in the second quarter, the actions we have taken to significantly enhance pricing for new and renewing mortgages... give us reasons for cautious optimism,” Chief Executive Officer Andrew Moor said in a statement.

The company posted a quarterly net income of C$11.9 million, or 80 cents a share, compared with C$9.7 million, or 74 cents a share, a year earlier.

Analysts were expecting earnings of C$57 cents a share, before items, according to Reuters Estimates.

Mortgage fundings rose 77.5 percent to $532.1 million, helped by growth in Canada Mortgage and Housing Corp (CMHC)-insured multi-unit residential mortgage production.

Equitable Group securitized and sold $407.6 million of CMHC-insured mortgages, at improved spreads, compared with $165.0 million in the first quarter of 2008.

The company’s shares closed at C$14.49 Wednesday on the Toronto Stock Exchange. (Reporting by Isheeta Sanghi in Bangalore; Editing by Himani Sarkar)

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