Laurentian Bank is reporting a 33% increase in profit, due in part to the sale of its debit and credit-card transaction processing businesses.

Laurentian said today that it earned $13.7 million, or 31¢ a share, for the third quarter ended July 31. That compared with $10.3 million, or 29¢ a share, a year ago.

Revenue dropped to $121.2 million from $148.3.

The bank said it made $5.6 million on the sale of its debit and credit-card processing businesses. That move followed Laurentian’s sale of 57 branches in Ontario and Western Canada in 2003 to TD Bank in a move to focus on Quebec, its home market.

Laurentian’s provision for credit losses during the most recent quarter dropped by more than one-third to $10.9 million from $16 million, although it was up slightly from $10.5 million in the second quarter.

The bank also said earnings were depressed by lower revenues from treasury and financial market operations due to the recent rise in interest rates.

“The steps that we have taken over the last 18 months have improved our competitive positioning,” Raymond McManus, president and CEO of Laurentian, said in a news release.

However, he warned the bank is facing lower demand for commercial credit. “Although this should not substantially compromise our 2004 objectives, it may be reason for concern in 2005 and 2006,” he said.