TORONTO, June 5 (Reuters) - Canadian Western Bank (CWB.TO) said on Thursday its second-quarter profit rose 14 percent as higher banking and trust earnings outweighed lower insurance earnings, and it raised its quarterly dividend.
The regional bank, Canada’s seventh-largest by market value and the last of the bank group to report results for the three months ended April 30, said it earned C$25.3 million ($24.8 million), or 39 Canadian cents a share.
That compared with C$22.2 million, or 35 Canadian cents a share, a year earlier.
While many other Canadian banks have abandoned their 2008 goals for profit growth, Canadian Western is running ahead of its 15 percent profit growth target for the financial year. Its earnings are up 20 percent at the half-way point.
The bank, based in Edmonton, Alberta, said total revenues rose 10 percent in the latest quarter to C$74 million, while loans were up 3 percent.
Credit quality worsened slightly at the big Canadian banks in the second quarter, but Canadian Western, which has no exposure to U.S. loans, said credit quality was strong.
It offers banking and trust services in Canada’s four western provinces, and sells auto and home insurance in Alberta and British Columbia through its Canadian Direct Insurance unit.
“Our overall credit quality remains strong and we are still seeing a healthy pipeline of new lending opportunities,” Canadian Western President and Chief Executive Larry Pollock said in a statement.
The bank raised its quarterly dividend to 11 Canadian cents a share from 10 Canadian cents.
Second-quarter return on equity fell to 16.1 percent, down from 16.8 percent a year earlier, reflecting a drop in net interest margin, it said.
Shares of Canadian Western were up 2 percent, or 50 Canadian cents, at C$25.63 on Thursday morning on the Toronto Stock Exchange.
Canadian Western’s stock is down about 18 percent so far in 2008, after outperforming other Canadian banks in 2007 with a 19 percent gain.
$1=$1.02 Canadian Reporting by Lynne Olver; Editing by Peter Galloway