MONTREAL – Laurentian Bank of Canada reported a slight increase in profits in the first quarter as it works through reform efforts.
The bank said Friday it had a first-quarter profit of $38.6 million, up from $37.3 million a year earlier.
Laurentian’s profits were helped somewhat because its provisions for bad loans of $15.2 million in its latest quarter was down slightly from $16.9 million a year earlier, in contrast to some banks that have had to raise provisions because of tariff and economic concerns.
The bank’s allowances for credit losses, a separate balance sheet measure, were also down from a year ago, but overall hasn’t seen big swings because a string of struggles meant Laurentian never reduced it like some other banks.
“We’ve not reduced after COVID as other banks have done because we’ve been going from one pessimistic scenario to the next,” Christian De Broux, Laurentian’s chief risk officer, told a conference call with investors and analysts.
“We went through supply chain issues. We went through the rapid rise of interest rates, and now we’re morphing into geopolitical concerns. And so that’s why you’re not seeing as much ramping up as elsewhere.”
Other Canadian banks this quarter have said the threat of tariffs has led to some hesitation in commercial loans, but Laurentian said it’s still seeing growth.
Laurentian reported 3.6 per cent growth quarter-over-quarter in commercial loans, driven mostly by its inventory and equipment financing lines that are heavily U.S.-focused.
“Our inventory financing business is 90 per cent in the U.S., distributing for the vast majority of U.S. products from manufacturers, so from that standpoint, we feel good,” chief executive Éric Provost said.
“The other big segment for us in Canada is commercial real estate, and there the vast majority is in housing projects which demand remains strong. We’re still seeing momentum with the interest rate decrease.”
Provost said the bank is seeing quite a different sentiment in the U.S. with discussions not tariff-focused, at least at events like a Florida boat show he attended to talk with clients.
“The dealer base, the consumer confidence, after the election of the new administration. It is more positive actually than last year.”
Along with dealing with economic uncertainty, Laurentian has been working through its own turnaround and restructuring.
The bank expects elevated expenses for the rest of the year as it spends on infrastructure and other operational measures,” said Provost.
“We are making steady progress on the critical foundational investment outlined in our strategic plan. A key milestone was the successful completion of a comprehensive mainframe upgrade which has greatly enhanced our operational resiliency.”
The Montreal-based bank said Friday the profit amounted to 76 cents per diluted share for the quarter ended Jan. 31, up from 75 cents per diluted share in the same quarter last year.
Revenue totalled $249.6 million, down from $258.3 million.
On an adjusted basis, Laurentian says it earned 78 cents per diluted share in its latest quarter, down from an adjusted profit of 91 cents per diluted share a year earlier.
The average analyst estimate had been for an adjusted profit of 76 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Feb. 28, 2025.
Companies in this story: (TSX:LB)
