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A sign sits outside the head offices of Laurentian Bank in Montreal, March 19, 2013.CHRISTINNE MUSCHI/Reuters

Laurentian Bank of Canada has become the fourth Canadian bank to increase its quarterly dividend this earnings season after capping a strong year with higher profits in the fourth quarter, although they were shy of analyst estimates.

The Montreal-based bank is boosting its payout for the third time in the past year, raising its dividend by four per cent to 54 cent with the next payment in February.

It joins Quebec banking rival National Bank, Scotiabank, CIBC and Bank of Montreal, which all announced recently they are raising their dividends.

Laurentian is Canada's seventh-largest bank. It said the cost of adjusting some of its retail and corporate activities took a bite out of its fourth-quarter profit, although it still increased 30 per cent from the same time last year.

Laurentian's net income for the three months ended Oct. 31 was $33.8-million or $1.09 per diluted share, up from $25.9-million or 82 cents per share in the fourth quarter of its 2013 financial year.

The profits were reduced by $5.6-million or 19 cents per share of restructuring costs, including $4.4-million for severance and $1.2-million related to IT projects. The bank has the equivalent of 3,667 employees, down eight per cent from a year ago.

Excluding these one-time items, adjusted net income reached a record of $42.6-million or $1.39 per diluted share in the fourth quarter. That was up from $38.5-million or $1.26 per a share last year.

Revenues increased to $221.4-million, from $215.5-million.

Laurentian was expected to earn $1.41 per share on $221.6-million of revenues, according the analysts polled by Thomson Reuters.

For the full year, the bank's net income surged 17.5 per cent to $140.4-million on $874.1-million of revenues. Adjusted profits were $163.6-million or $5.31 per diluted share, up from $155.4-million or $5.07 per share in 2012.

"Our growth in business activities, as well as our rigorous control over expenses and the sustained credit quality of the loan portfolio contributed to our strong financial performance in an environment of slowing consumer loan demand and compressed margins," stated president and CEO Rejean Robitaille.

He said the bank will continue to focus in 2015 on higher-margin commercial activities and increasing its footprint outside of Quebec.

During the 2014, it realized cost savings from completing the integration of MRS Companies and AGF Trust acquisitions. The bank's long-term credit rating was upgraded to A (low) by DBRS.

Provisions for loan losses increased by $6-million to reach $42-million for the year, and were up five per cent to $10.5-million in the fourth quarter, but unchanged from the third quarter.

The bank's core personal and commercial segment's adjusted profit grew nearly 18 per cent to $33.4-million in the quarter on $153.8-million of revenues.

B2B Bank earned $8.46-million, up from $4.4-million a year ago, on $43.6-million of revenues. Laurentian Bank Securities earnings slipped to $2.4-million from $2.9-million a year ago on $16.16-million of revenues.

On the Toronto Stock Exchange, Laurentian's shares lost $1.55 or more than three per cent at $48.72 in midday trading.

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 27/03/24 3:59pm EDT.

SymbolName% changeLast
BMO-N
Bank of Montreal
+0.43%96.38
BMO-T
Bank of Montreal
+0.32%130.77
BNS-N
Bank of Nova Scotia
+1.51%51.16
BNS-T
Bank of Nova Scotia
+1.4%69.42
CM-N
Canadian Imperial Bank of Commerce
-0.46%50.07
CM-T
Canadian Imperial Bank of Commerce
-0.66%67.9
LB-T
Laurentian Bank
+1.82%28.03
S-T
Sherritt Intl Rv
0%0.28
TRI-N
Thomson Reuters Corp
+0.55%155.95
TRI-T
Thomson Reuters Corp
+0.41%211.67

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