Laurentian Bank Reports First-Quarter Loss
MONTREAL — Laurentian Bank experienced a loss in the first quarter, but the CFO reassured that this was primarily due to accounting factors, not a reflection of the bank’s overall performance.
In a recent interview, Yvan Deschamps emphasized there was “no concern at all about the results announced this morning,” aiming to calm customers and employees alike.
The bank recorded a net loss of $20.5 million for the quarter ending January 31, mainly attributed to $61.2 million in expenses linked to its sale to Fairstone Bank.
Back in December, Laurentian announced plans to restructure into a specialized commercial bank, with Fairstone set to acquire the longstanding Quebec institution for $1.9 billion.
As part of the restructuring, Laurentian will sell its retail and small to medium-sized banking operations to National Bank.
Interestingly, despite the changes, the branch and its 700 employees will remain in place, with the Laurentian name continuing under Fairstone, which is more focused on corporate services.
Deschamps mentioned that an accounting charge was necessary to cover severance costs and anticipated branch closures.
He also noted that branch operations will proceed as usual until the transaction wraps up. “These are very much future items that we are considering from an accounting perspective today,” he explained.
Regarding finances, the CFO assured that these charges wouldn’t hinder liquidity or undermine the balance sheet. “We are very solid in terms of liquidity,” he stated.
When adjusted for accounting costs, the bank reported earnings of $34.2 million for the last quarter, a bit lower than the $39.4 million from the same period last year.
Laurentian is holding steady on the value of its loan and deposit portfolio, which will eventually transition to a national bank.
As of January 31, total loans for Quebec provincial banks reached $36.2 billion, a rise from $35.8 billion three months prior to this announcement.
Deposits also saw growth, totaling $24.3 billion, compared to $24.0 billion in the last quarter.
Revenues amounted to $251.6 million, a slight increase from $249.6 million year-over-year.
On an adjusted basis, the diluted earnings per share were reported at 65 cents for the latest quarter, a decrease from the previous year’s 78 cents per share.
