Laurentian Bank of Canada reported a more-than-200% increase in fourth quarter earnings and announced a three-year plan to “reposition” the Montreal-based bank.

The bank said earnings in the final three months of fiscal 2003, ended Oct. 31, jumped to $50.7 million from $15.9 million a year earlier, a jump of 218%. Earnings per common share (diluted) were $2.01 vs 52¢. Total revenues for the quarter were $200.8 million, up from $143.8 million in 2002.

But the bank said that excluding the gain on the sale of 57 branches in Ontario and Western Canada, announced in August, and restructuring charges incurred during the quarter, net income would have been $6.6 million or 13¢ per share.

For the full year, net income was $91.9 million ($3.32 per share) vs $44.3 million ($1.26) in 2002. Excluding special items, net income would have been $56.2 million ($1.80) vs $86.7 million ($3.09).

Raymond McManus, Laurentian president and chief executive, said 2003 has been a “year of transition” for the bank. “A weak economic environment coupled with increasingly intense competition, particularly in the mortgage market, has hampered results in 2003,” he said in a statement.

McManus said the first step in the repositioning was the sale of branches in Ontario and Western Canada to TD Bank Financial Group. The move, he said, will allow the bank to focus on strengthening market share in Quebec.

“We have also reinforced our organization internally with a flatter organizational structure, which we believe will provide more flexibility and will improve our efficiency.”

He said the sale has given the bank a stronger balance sheet heading into 2004 and a lower risk profile with the highest Tier 1 and total capital ratios in its history. “Such strong capital ratios will enhance our flexibility with a view to future business expansion and acquisition opportunities.”

McManus said the three-year plan involves a “retailer approach” to client servicing. Twenty new branches will be opened in Quebec by 2006 and the number of automated banking machines increased by 10 per cent in the first year of the plan. Laurentian hopes to grow its revenues by an average of 6% a year.

To gauge customer satisfaction, the bank will conduct client surveys four times a year and develop new marketing programs to bring in new business. “We want to treat our customers like guests, by emphasizing a more consumer-oriented retailing approach.”
McManus said there is strong market potential for increasing the level of cross-selling to customers. “We intend to increase the average number of products held by a customer, notably by repositioning some of our products such as our VISA Gold card.”