Laurentian Bank on Thursday reported a return to profitability for the second quarter ended April 30.
The bank said its results were hurt by a provision for credit losses against its Air Canada exposure.
Net profit for the quarter was $11 million, or 32¢a share. That compared with a loss $18.4 million, or 95¢a share, in the year-earlier period.
Laurentian said it set aside $16 million in loan-loss provisions, including $5 million for its exposure to Air Canada, which is operating under bankruptcy protection and is in the middle of restructuring.
The Air Canada exposure cut into profit by 13¢ a share. Last year, the bank booked $80 million in provisions,.
The bank’s eturn on equity was 4.9%, up from negative 14.4% in the year-earlier period. Revenues fell to $137.7 million from $153.6 million as
Commenting on the second quarter results, Raymond McManus, president and CEO said: “Laurentian Bank’s operating results continue to be affected by a lack of loan growth and pressure on revenues. Consequently, we have no alternative but to reduce the bank’s cost structure.”
As at April 30, the bank’s BIS Tier I and Total capital ratios were 8.8% and 13.3% respectively.