Laurentian Bank of Canada today said its fourth-quarter profit fell 86%, hurt by low interest margins and weak loan growth.

The bank said net income for the three months ended Oct. 31, was $7.1 million, or 17¢a share, down from $50.7 million, or $2.01 per share, in the year-before period.

Return on equity was 2.4%, down sharply from 29.5% in the same period last year.

The bank said the decrease in profitability, compared to the fourth quarter of 2003, is largely attributable to the gain on the sale of branches in Ontario and
Western Canada, partially offset by a restructuring charge, higher variable compensation costs and a write-down of certain securities all recorded in 2003. As well, the lost contribution in 2004 from the branches sold in Ontario and Western Canada affected results.

The bank also that it is offering to take over the Quebec retail operations of one of big five banks, confirming an earlier media report that suggested Laurentian would pay by offering a stake of itself in exchange for the operations.

“In order to further accelerate our plan, one of my main objectives for 2005 is to convince one of the big five Canadian Chartered Banks to combine its Quebec retail operations into the Laurentian Bank,” said Raymond McManus, president and CEO in a release.