Cost-cutting efforts offset weaker non-interest income, while the bank navigates an uncertain economic outlook
Laurentian Bank of Canada posted $38.6 million in net income for the first quarter of 2025, up slightly from $37.3 million in the same period last year.
Diluted earnings per share (EPS) rose to $0.76, compared to $0.75 in Q1 2024. However, total revenue fell by $8.7 million to $249.6 million, reflecting weaker non-interest income.
Laurentian’s revenue decline was driven by a $9.7 million drop in non-interest income, which fell 13% year-over-year to $63.4 million. The bank pointed to lower lending fees and a decline in brokerage commissions following the sale of its retail full-service investment broker division in Q4 2024.
"Our decision, as an organization, to adopt a focused approach in areas where we can win is starting to prove to be the right strategy," Laurentian Bank president and CEO Éric Provost said in a Press release. "Combining our established strengths with new growth opportunities in our specialized commercial groups is leading the way to long-term success. Our strong liquidity and capital levels position us well to face the current macroeconomic and geopolitical uncertainties."
Lending fees fell by $3.6 million, reflecting continued weakness in real estate activity. Brokerage commissions dropped by $6.8 million, as the bank no longer benefited from the now-divested assets. Income from financial instruments increased by $4.1 million, offsetting some losses as market conditions improved.
Meanwhile, net interest income edged up by $1.0 million to $186.2 million, supported by loan repricing and changes in the bank’s business mix. The net interest margin improved to 1.85%, up five basis points from a year earlier.
The bank has been cutting costs and restructuring operations, with non-interest expenses falling by $10.9 million to $187.0 million as it reduced headcount and trimmed other overhead costs. But adjusted net income declined to $39.4 million, down from $44.2 million a year ago, as revenue pressures offset some of the cost savings.
Laurentian set aside $15.2 million for credit losses, down from $16.9 million in Q1 2024. The decrease was mainly due to releases of provisions on performing loans, though provisions on impaired loans increased.
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The bank’s latest results come as Canada’s largest lenders report their Q1 earnings, revealing a financial sector navigating an uncertain economic environment. Geopolitical tensions, the threat of tariffs, a looming federal election, and a slowing Canadian economy have weighed on what could have been a stronger start to the year.
Analysts had expected higher loan loss provisions across the sector, which could have cut into profits, but the country’s six major banks all managed to beat expectations.
- Bank of Nova Scotia: $993 million in Q1 profit
- Bank of Montreal: $2.1 billion
- National Bank of Canada: $997 million
- Royal Bank of Canada: $5.1 billion
- Toronto-Dominion Bank: $2.79 billion
- Canadian Imperial Bank of Commerce: $2.17 billion
Despite the stronger-than-expected results, Canadian bank stocks have continued to underperform compared to their US counterparts, reflecting ongoing concerns about the domestic economy.
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