Source: The Canadian Press

Strong growth in mortgage and commercial loans helped the Laurentian Bank of Canada (TSX:LB) to post a 34% increase in second-quarter profit compared with a year ago.

The bank said it earned $28.3 million or $1.06 per diluted share for the quarter ended April 30, compared with a profit of $21.2 million or 76 cents per diluted share a year ago.

Revenue in the quarter increased 15% to $178.1 million compared with $154.8 million in the second quarter of 2009.

Provisions for loan losses amounted to $16 million, up from $12 million a year ago, while return on common shareholders’ equity improved to 10.9% compared with 8.5% in the same period last year.

The results were in line with analyst expectations, but slightly lower than the first quarter, when its profits were $32 million, or $1.21 per share, on $180.4 million in revenues.

In the commercial property sector, increased loan volumes and improved interest margins in the second quarter contributed to a 38-per-cent increase in revenues and 80% boost in net income. Loan losses, however, grew 25% to $4 million, due to “a limited number of accounts requiring provisions.”

Business from individuals and small businesses pushed revenue up 7% and net profit was 3% higher. This sector has suffered from low net interest margins, particularly due to strong competition and loan losses, which rose 42% to $11.5 million.

Laurentian Bank Securities Capital Markets saw its revenues rose 9% but net income declined 23%, while B2B Trust, a subsidiary service to financial intermediaries, saw its revenues grow 24% and its net profits rise 45%.

Bank president and CEO Rejean Robitaille reiterated the financial targets for the year, representing a return on equity of between 10 and 12% and an earnings per share of between $4 and $4.70.

The Laurentian Bank share closed at $ 42.81, down 27 cents at the Toronto Stock Exchange.

Laurentian is Canada’s seventh-largest bank.