Laurentian Bank cuts dividend by 40%
Dividend slash is first for a major Canadian bank in almost 30 years
Laurentian Bank slashed its dividend by 40 per cent on Friday, the first such move by a major Canadian lender in almost three decades.
The Montreal-based lender said Friday its profit fell by 79 per cent to $8.9 million, and its provisions for credit losses — the amount of money the bank is setting aside to cover loans that may go bad — soared to $54.9 million. That's up from $9 million in the same period a year ago.
COVID-19 is throwing uncertainty to the bank's outlook, so it cut its dividend to 40 cents a share as a precaution. Previously it was 67 cents a share.
"We have a strong capital and liquidity position, and disciplined risk management, but it is a time for prudence," CEO François Desjardins said. "Although we believe that current earnings are not reflective of the future earnings power of the organisation, we have reduced the dividend to $0.40 per share which improves operational flexibility until we reap the anticipated benefits of our strategic plan."
The last time a major Canadian bank slashed its dividend was 1992, when National Bank cut the payout to its shareholders.
More to come
Tell us what you think!
Help shape the future of CBC article pages by taking a quick survey.