Laurentian Bank Q2 profits hold steady in tough times

Laurentian Bank of Canada managed to avoid a huge drop in profit in the bank's second quarter, according to its latest earnings report released Wednesday.

The Montreal-based chartered bank made $21.2 million for the period ended April 30, 2009 — down 15 per cent compared to earnings of $25.1 million for the same period one year earlier.

Given the recession, however, the Quebec-focused bank said it was pleased with its ability to maintain its profitability.

"The difficult economic conditions and unprecedented low interest rate environment have hampered profitability during the last quarter. However, measures aimed at restoring revenue growth have started to generate results," said Réjean Robitaille, Laurentian's president and chief executive officer.

For the first six months of its fiscal year, Laurentian produced a 9.3 per cent return for shareholders compared to a target range of 10 per cent to 12 per cent.

Three-month stock chart for Laurentian Bank of Canada

By contrast, the Bank of Montreal saw its quarterly earnings tumble by 44 per cent in its latest financial report.

On a per-share basis, Laurentian earned 76 cents in the second quarter compared to 93 cents for the same period one year earlier.

As an example of the tough economy, however, Laurentian's quarterly revenue was flat at $154.8 million, compared to revenue of $155.5 million for the same three months one year earlier.

Laurentian was able to hold on to its profit mainly through growing its base of residential mortgages. The bank said it had boosted its home lending by $368 million in the three-month period without increasing the risk to the mortgage portfolio.

Laurentian also hiked its commercial mortgage and commercial loan portfolios by more than $120 million and $90 million, respectively, for the first six months of the year.