MONTREAL - Laurentian Bank of Canada will continue pursuing growth outside Quebec in areas such as commercial lending and mortgages this year after boosting its first-quarter profit to $35.5 million.
Chief executive Rejean Robitaille said Wednesday the bank expects to meet its performance targets for fiscal 2014 and is "picking our spots" for growth, including a wider section of the Canadian economy.
The Quebec-based bank wants to specialize in commercial lending in areas such as renewable energy, health care and public-private partnerships, Robitaille told analysts on a conference call.
"We have initiatives in place to further diversify our portfolios geographically," he said.
Laurentian has its base in Quebec and a presence in Ontario, Alberta and British Columbia with about 3,800 employees.
Almost 40 per cent of the bank's loan portfolio is generated from outside Quebec, Robitaille said, adding that 74 per cent of commercial mortgages, 60 per cent of personal loans and 27 per cent of its mortgages are currently from other provinces.
In its financial results, Laurentian (TSX:LB) boosted its net profit by eight per cent in the quarter, up from $25.8 million year-over-year.
The profit amounted to $1.16 per share, up from $1.07 per share or $32.8 million in the first quarter of 2013.
Excluding certain items, Laurentian reported an adjusted profit for the quarter ended Jan. 31 of $39.3 million or $1.29 per share. That compared with $39.1 million or $1.30 per share last year.
Total revenue was up one per cent, rising to $216.1 million compared with $213.9 million a year ago.
However, the bank's provision for loan losses increased by $2.5 million to $10.5 million in the first quarter, up from $8 million in the first quarter of 2013.
Chief financial officer Michel Lauzon said the bank's overall credit quality is strong and continues to benefit from favourable credit conditions in Canada.
"But owing to the growth in loan portfolios, we could still incur a slight increase in impaired loans and loss provisions as the year progresses," he told analysts.
Desjardins analyst Michael Goldberg said that Laurentian's results were in line with his expectations, but added the bank's share price was "likely derailed by concerns about credit quality."
Shares in Laurentian closed down 58 cents to $45.92 on the Toronto Stock Exchange.