Laurentian Bank reports second-quarter profit up, raises dividend

Laurentian Bank reports second-quarter profit up, raises dividend
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MONTREAL — Laurentian Bank Financial Group raised its quarterly dividend as its second-quarter profit beat expectations.

The bank said Friday it will now pay a quarterly dividend of 64 cents per share, up a penny from its previous rate.

The increase came as Laurentian said it earned $55.9 million attributable to common shareholders or $1.34 per share for the quarter ended April 30.

That compared with a profit of $40.3 million attributable to common shareholders or $1.19 per share a year earlier when the bank had fewer shares outstanding.

On an adjusted basis, Laurentian said it earned $1.47 per share for the quarter, up from an adjusted profit of $1.39 per share a year ago.

The adjusted result topped the $1.38 per share that analysts on average had expected for the quarter, according to Thomson Reuters Eikon.

Laurentian chief executive Francois Desjardins said the bank posted good results while it continued to make significant progress in establishing a strong foundation.

“We have made important headway in addressing the mortgage loan review, which has no impact on our clients, and are confident that it will be completely resolved by the end of the fiscal year,” he said in a statement.

The bank said earlier this week that it has successfully resolved issues related to mortgage loans sold to an unnamed lender.

In December, the bank said an audit found the mortgages in question did not meet documentation and eligibility requirements and would need to buy back as much as $304 million in mortgages.

Laurentian revised that amount a month later to $392 million and said it had repurchased $180 million in loans, with another $88 million expected by the end of its second quarter.

As part of an agreement with the lender, the bank will repurchase an additional $115 million of ineligible mortgages during the third quarter of 2018, slightly lower than the bank’s initial assessment.

 

Companies in this story: (TSX:LB)

The Canadian Press

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