Laurentian Bank raises dividend
Bank will pay a quarterly dividend of 64 cents per share, up a penny from its previous rate.
Laurentian Bank Financial Group expects to put troubles related to a mortgage loan review behind it this year, chief executive Francois Desjardins said Friday as the bank raised its dividend and reported a better-than-expect profit in its second quarter.
"I am pleased with the progress we have made, and although not yet complete, management is confident that we have a clear path to resolution," Desjardins said on a conference call with financial analysts.
"Managing this file has been a learning experience that will help us better manage our business, implementing enhanced quality control and origination processes throughout the group, strengthening our compliance and risk management practices."
The bank said earlier this week that it has successfully resolved issues related to mortgage loans sold to an unnamed lender that was first disclosed last year.
However, Laurentian also said Tuesday a CMHC audit during the bank's most recent quarter found mortgages that were inadvertently portfolio insured while they did not meet CMHC portfolio insurance eligibility criteria.
As a result, the bank said it will repurchase those other mortgage loans that were inadvertently portfolio insured and sold to the CMHC securitization program. Based on the results of CMHC's audit, the bank estimates the total amount to be repurchased at between $125 and $150 million.
Laurentian shares rose 2.9 per cent at $46.49 on the Toronto Stock Exchange Friday after the bank announced it will now pay a quarterly dividend of 64 cents per share, up a penny from its previous rate. It also reported it earned $55.9 million attributable to common shareholders or $1.34 per share in its second quarter ended April 30.
That compared with a profit of $40.3 million attributable to common shareholders or $1.19 per share a year earlier when the bank had fewer shares outstanding.
On an adjusted basis, Laurentian said it earned $1.47 per share for the quarter, up from an adjusted profit of $1.39 per share a year ago.
The adjusted result topped the $1.38 per share that analysts on average had expected for the quarter, according to Thomson Reuters Eikon.