Laurentian Bank Q3 Earnings – Struggles Persist

ByDan Kent Published On:

Laurentian Bank of Canada released its third quarter 2024 financial results on 30 August 2024.

On an adjusted basis, net income was $43.1 million with diluted earnings per share of $0.88, down from $57.6 million and $1.22 respectively in the prior year period.

The bank’s return on common shareholders’ equity declined to 4.7% in Q3 2024, compared to 6.9% in Q3 2023.

For the first nine months of fiscal 2024, Laurentian Bank posted a net loss of $46.2 million, contrasting sharply with net income of $150.5 million for the same period in 2023. This resulted in a diluted loss per share of $1.29, compared to earnings of $3.22 per share a year earlier.

Key financial metrics for Q3 2024 included:

  • Efficiency ratio: 78.1%
  • Common Equity Tier 1 (CET1) capital ratio: 10.9%
  • Adjusted efficiency ratio: 73.3%

The bank’s performance was impacted by significant impairment and restructuring charges totalling $212 million before taxes, recorded in the second quarter of 2024. These charges were related to the restructuring of bank operations and impairment within the Personal & Commercial Banking segment.

Éric Provost, President and CEO of Laurentian Bank, commented on the results:

“Since the introduction of our strategic plan, we are progressing on our priorities, including a review of customer experience roles and the simplification of our organisation. Our focus remains on leveraging our specializations and investing in technology to strengthen our foundation.”

He added, “Despite macroeconomic challenges, our strong capital position and strategic investments are setting the stage for future growth. We are committed to executing our plan and creating an efficient organization that fosters long-term value and benefits for our customers and all stakeholders.”

The bank’s CET1 capital ratio improved to 10.9% as of 31 July 2024, up from 9.8% a year earlier, indicating a strengthened capital position, but one that is still relatively weak.

For Q3 2024, the adjusted net income of $43.1 million excluded $9 million in pre-tax adjusting items.

Looking ahead, Laurentian Bank faces both opportunities and challenges. The ongoing implementation of its strategic plan, including operational simplification and technological investments, aims to drive future growth. However, macroeconomic headwinds and industry-wide pressures may continue to impact performance in the near term.