May 28, 2008 / 3:13 PM / in 9 years

UPDATE 1-Laurentian Bank posts higher profit, shares rally

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TORONTO, May 28 (Reuters) - Laurentian Bank’s (LB.TO) second-quarter profit rose 21 percent due to growth in its loan and deposit portfolios, the bank said on Wednesday, sending its shares to their highest level in nearly two weeks.

Laurentian, Canada’s eighth-largest bank by market value, said it earned C$25.1 million ($25.4 million), or 93 Canadian cents a share, in the quarter ended April 30.

That compared with profit of C$20.7 million, or 75 Canadian cents a share, a year earlier.

Analysts tracked by Reuters Estimates had expected profit of 80 Canadian cents a share in the quarter.

Montreal-based Laurentian, a big financial player in the province of Quebec, said its return on equity was 11.2 percent, up from 9.7 percent a year earlier.

“We have been able to maintain our course, and again deliver strong earnings, despite the turmoil which continues to affect the capital markets,” Rejean Robitaille, Laurentian’s chief executive, said in a statement.

Laurentian also said its provision for credit losses was $10.0 million in the quarter, unchanged from the same period last year.

Shares of Laurentian rallied on the Toronto Stock Exchange after the news to C$42.53, a gain of 3 percent, which marked their highest level since May 16.

Laurentian’s stock is the best performer of all Canadian banks so far in 2008, with a 24-percent gain year-to-date.

Shares of its closest peer -- Canadian Western Bank (CWB.TO), which is seventh-largest in the country by market capitalization -- have fallen 15 percent in the same period.

$1=$0.99 Canadian Reporting by Frank Pingue; Editing by Peter Galloway

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