Laurentian Bank earnings down 7%

The results were, however, better than analysts' forecasts.

Laurentian Bank's profitability deteriorated in the first quarter, while its margins are under pressure and the #x27;it makes investments.

Laurentian reported net income of $51.9 million in the first quarter (ended January 31), representing a decline of 7%.

The macro backdrop remains uncertain, CEO Rania Llewellyn said on a conference call on Tuesday to discuss first-quarter results. Central banks are trying to control inflation while economic indicators are mixed causing a lot of volatility.

The banker mentioned that the efficiency ratio deteriorated due to temporary pressures on our interest margins, investments in our strategic priorities as well as seasonal items that impacted our salaries and benefits.

However, the results are above analysts' expectations. Adjusted diluted earnings per share were $1.15, compared to $1.31 for the same period last year. Prior to the earnings release, analysts had expected earnings per share of $1.12, according to Refinitiv.

Overall, loss provisions were lower larger than expected and higher revenues, summarizes analyst Gabriel Dechaine of National Bank Financial. The expense, however, was greater than he had anticipated.

Among the highlights, Laurentian managed to increase its deposits by $400 million, or 2%, in three months. The interest margin at 1.77% remained stable compared to the previous quarter.

This is a good result in the context of successive increases interest rates, says analyst Mario Mendonca of TD Securities.

If the Central Bank keeps monetary policy on hold, the chief financial officer, Yvan Deschamps, believes that margins should gradually improve during the second half of the fiscal year.

Provisions for credit losses stood at $15.4 million, an increase of $6 million from the provision of $9.4 million in the same period last year.

The action Laurentian was down 70 cents, or 1.99%, to $34.40 on the Toronto Stock Exchange around noon Tuesday.