MONTREAL — Laurentian Bank of Canada raised its dividend Friday as it reported a fourth quarter loss related to restructuring charges, while adjusted profits showed gains from a year earlier.

Company chief executive Rania Llewellyn said on an analyst call that the bank was raising its dividend by 10 per cent both because it was holding excess capital, and to reward shareholders for sticking with the bank as it reforms and looks to the future.

"We just wanted to reward our shareholders for their patience, as well as deliver a message to the street that we are confident in the future of our bank."

The bank will now pay a quarterly dividend of 44 cents per share, up from 40 cents.

The increased payment to shareholders came as the bank said it lost $102.9 million or $2.39 per diluted share in the quarter ended Oct. 31 as it recorded $189.4 million in impairment and restructuring charges following the strategic review.

The result compared with a profit of $36.8 million or 79 cents per share in the same quarter last year.

On an adjusted basis, Laurentian says it earned $47.8 million or $1.06 per diluted share in its most recent quarter, up from an adjusted profit of $42.3 million or 91 cents per diluted share in the same quarter last year.

Analysts on average had expected the bank to report an adjusted profit of 92 cents per share, according to financial markets data firm Refinitiv.

Scotiabank analyst Meny Grauman said in a note that the earnings beat was very good to see, despite it being driven by better-than-expected expenses tied to the restructuring charge.

"The Q4 result today has some notable aspects including a more significant return of capital announcement than investors had expected," he said.

He said it was also notable that the bank also recorded two per cent sequential loan growth, mostly on the commercial side but also from material growth on mortgages.

Llewellyn said on the call that the company has been working to grow its loan book.

"Over the last few quarters, we identified mortgages as a huge growth opportunity for us because we are underpenetrated."

She said growth in the area has more been hampered by processing speeds than demand, so the bank has been focusing on a more efficient flow of mortgage approvals.

The company is also rapidly playing catch-up on the digital side, rolling out its first app after seven months of development thanks to a third-party partnership.

The one-time restructuring charges were also part of the bank's turnaround plans, which include a 50 per cent reduction in leased corporate office space in Toronto, Burlington, Ont., and Montreal.

The bank also took a charge related to a decision regarding its core-banking technology system, organizational changes and an impairment charge on the value of its personal banking businesses.

Provisions for credit losses were $24.9 million for the quarter compared with $24.2 million for the fourth quarter of 2020, as higher provisions on performing loans were partly offset by lower provisions on impaired loans.

Revenue totalled $250.4 million for the quarter, up from $243.5 million a year ago.

For its full year, Laurentian said it earned $57.1 million or $1.03 per diluted share on $1 billion in revenue. The result compared with a profit of $114.1 million or $2.37 per diluted share on $971 million in revenue a year earlier.

On an adjusted basis, Laurentian says it earned $211.2 million or $4.57 per diluted share for its full year, up from $138.2 million or $2.93 per diluted share a year earlier.

This report by The Canadian Press was first published Dec. 10, 2021.

Companies in this story: (TSX:LB)

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