TORONTO (Reuters) - Canadian Western Bank (CWB.TO) said its profit jumped 39 percent in the fourth quarter, driven by revenue growth and a lower tax rate.
The regional bank also raised its quarterly dividend by 11 percent, to 10 Canadian cents a share from 9 Canadian cents, and its share price rose, bucking the trend among its bigger domestic peers.
Canadian Western, based in Edmonton, Alberta, said it earned C$29.6 million ($29.2 million), or 46 Canadian cents a share, in the three months ended October 31. That was up from C$21.2 million, or 33 Canadian cents a share, a year earlier.
Total revenues jumped 25 percent from the same 2006 quarter, it said.
Shares of Canadian Western climbed 4 percent to C$29.08 on the Toronto Stock Exchange on Thursday morning. The shares of Canada’s seven other chartered banks were lower, led by a 6 percent drop by Canadian Imperial Bank of Commerce as investors fretted about CIBC’s hedged exposure to U.S. subprime mortgage derivatives.
For Canadian Western, Alberta and British Columbia were the primary areas of loan growth in the latest quarter, and the bank cited “strong performance” in the real estate, energy and personal lending sectors.
It stressed that it has no direct exposure to U.S. subprime mortgages, collateralized debt obligations or Canadian non-bank asset-backed commercial paper. The latter is a segment of the domestic credit market that froze up in August.
“We continue to benefit from Western Canada’s economies and expect to achieve sustained, high-quality organic growth,” Larry Pollock, the bank’s president and chief executive, said in a statement.
Canadian Western, the country’s seventh-largest bank by market capitalization, also has insurance and trust businesses.
But along with its domestic peers, Canadian Western presented a more modest outlook for 2008.
It expects earnings growth to slow, after posting record 2007 results.
Its 2008 target is for 15 percent profit growth, well below the actual 34 percent increase last year. It earned C$96.3 million in fiscal 2007, or C$1.50 a share.
Loan growth, which came in at 28 percent in 2007 -- twice the bank’s 14 percent target -- is expected to slow in 2008, with a 15 percent target.
Reporting by Lynne Olver; Editing by Rob Wilson