Customers were not affected by the issue, bank assures
Laurentian Bank of Canada has announced that it has resolved a much-criticized sale of mortgages that were designated portfolio insured by mistake, when said sale did not fulfill the CMHC’s standards for portfolio insurance.
The issued have been resolved to the satisfaction of the CMHC and the third-party buyer, the bank stated. It assured that none of its customers were affected by the transaction.
Earlier this year, Laurentian Bank president and CEO Francois Desjardins admitted that the institution underestimated the market reaction to the irregularities, but also said that the issue has been “over mediatized.”
“The amount mentioned is $400 million [of potentially redeemed loans] on [managed assets] of $47 billion,” Desjardins told The Canadian Press. “That’s less than 1% of all the work we do.”
Read more: Laurentian Bank’s review of problematic mortgages to finish in Q2
The bank insisted that while the quality of the loans wasn’t bad, the product wasn’t what the still-undisclosed third party wanted.
The institution reported that its Q3 income stood at $54.9 million, with virtually no change compared to the same time last year. A 5% increase in revenue (up to $260.7 million) was counterbalanced by increases in costs, including acquisition-related expenses.
Commercial loan volume mainly propelled the revenue increase, in the wake of the bank’s acquisition of Northpoint Commercial Finance back in August 2017.
