The bank saw a substantial increase in its provisions for bad loans during the quarter
Laurentian Bank of Canada reported net income of $55.9 million for its Q3, representing a decline from $62.1 million during the same period last year.
The bank attributed the drop to its $11.2 million increase in provisions for bad loans during the quarter, amid mounting inflationary pressures.
“The macroeconomic environment continues to be uncertain and volatile, and is being weighed down by high inflation, very rapid interest rate increases and geopolitical tensions,” said Rania Llewellyn, CEO of Laurentian Bank.
“Results were mostly driven by the conversion of our strong unfunded pipeline in the construction portfolio to support the multi-residential segments, as developers continue to catch up to the structural supply shortage in certain markets.”
Read more: Commercial lending fuels Laurentian Bank surge
However, Laurentian Bank is still expecting to reach its 2022 financial targets, mainly due to robust performance from its commercial business that saw a 29% annual increase in loans. This more than offset the bank’s mere 1% annual increase in residential mortgage origination and the 10% annual decline in personal loans.
Overall, Q3 revenue amounted to $260 million, up from $254.9 million last year.
“We continue to redeploy capital, in line with our strategic plan to support profitable, sustainable organic growth,” Llewellyn said.
