|
The financial
information reported herein is based on the condensed interim
consolidated (unaudited) information for the three-month period
ended October 31, 2023 and on the audited consolidated
financial statements for the year ended October 31, 2023, and
has been prepared in accordance with International Financial
Reporting standards (IFRS), as issued by the International
Accounting Standards Board (IASB). All amounts are denominated in
Canadian dollars. The Laurentian Bank of Canada and its entities
are collectively referred to as "Laurentian Bank" or the "Bank" and
provide deposit, investment, loan, securities, trust and other
products or services.
The Bank's 2023 Annual
Report (which includes the Audited Consolidated Financial
Statements and accompanying Management's Discussion & Analysis)
will be available today on the Bank's website at www.lbcfg.ca and
on SEDAR+ at www.sedarplus.ca.
|
MONTREAL, Dec. 7, 2023
/CNW/ - Laurentian Bank of Canada
reported net income of $181.1 million
and diluted earnings per share of $3.89 for the year ended October 31, 2023, compared with $226.6 million and $4.95 for the year ended October 31, 2022. Return on common shareholders'
equity was 6.6% for the year ended October
31, 2023, compared with 8.9% for the year ended October 31, 2022. Adjusted net income was
$208.3 million and adjusted diluted
earnings per share were $4.52 for the
year ended October 31, 2023, compared
with $237.1 million and $5.19 for the year ended October 31, 2022. Of note, reported results for
the year ended October 31, 2023
included restructuring and strategic-review related charges of
$24.1 million ($17.7 million after income taxes), or
$0.41 per share, as further detailed
in the Non-GAAP Financial and Other Measures section. Adjusted
return on common shareholders' equity was 7.7% for the year ended
October 31, 2023, compared with 9.3%
for the same period a year ago.
For the fourth quarter of 2023, reported net income was
$30.6 million and diluted earnings
per share were $0.67, compared with
$55.7 million and $1.26 for the fourth quarter of 2022. Return on
common shareholders' equity was 4.5% for the fourth quarter of
2023, compared with 8.7% for the fourth quarter of 2022. Of note,
reported and adjusted results for the fourth quarter of 2023
included a negative pre-tax impact of $5.3
million ($3.9 million
after income taxes), or $0.09 per
share, from the mainframe outage that occurred in September 2023. Reported results for the fourth
quarter of 2023 also included restructuring and strategic-review
related charges of $15.9 million
($11.7 million after income
taxes), or $0.27 per share, as
further detailed in the Non-GAAP Financial and Other Measures
section. Adjusted net income was $44.7
million and adjusted diluted earnings per share were
$1.00 for the fourth quarter of 2023,
compared with $57.8 million and
$1.31 for the fourth quarter of 2022.
Adjusted return on common shareholders' equity was 6.6% for the
fourth quarter of 2023, compared with 9.0% for the same period a
year ago.
"Laurentian Bank is an integral part of our society and our
place in this ecosystem is unwavering as we continue to support
Canadian families, businesses, and communities achieve their
dreams," said Éric Provost, President & CEO. "That's why we are
taking steps today to streamline the Bank and revamp our strategic
plan to focus on serving our customers and ensuring that we remain
a strong Quebec-based
institution."
|
For the three months
ended
|
|
For the year
ended
|
|
In millions of dollars,
except per share and percentage
amounts (Unaudited)
|
October 31,
2023
|
|
October 31,
2022
|
|
Variance
|
|
October 31,
2023
|
|
October 31,
2022
|
|
Variance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
basis
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
30.6
|
|
$
55.7
|
|
(45) %
|
|
$
181.1
|
|
$ 226.6
|
|
(20) %
|
|
Diluted earnings per
share
|
$
0.67
|
|
$
1.26
|
|
(47) %
|
|
$
3.89
|
|
$
4.95
|
|
(21) %
|
|
Return on common
shareholders' equity(1)
|
4.5 %
|
|
8.7 %
|
|
|
|
6.6 %
|
|
8.9 %
|
|
|
|
Efficiency
ratio(2)
|
79.7 %
|
|
67.7 %
|
|
|
|
73.5 %
|
|
67.8 %
|
|
|
|
Common Equity Tier 1
(CET1) capital ratio(3)
|
9.9 %
|
|
9.1 %
|
|
|
|
9.9 %
|
|
9.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
basis
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
income(4)
|
$
44.7
|
|
$
57.8
|
|
(23) %
|
|
$
208.3
|
|
$ 237.1
|
|
(12) %
|
|
Adjusted diluted
earnings per share(1)
|
$
1.00
|
|
$
1.31
|
|
(24) %
|
|
$
4.52
|
|
$
5.19
|
|
(13) %
|
|
Adjusted return on
common shareholders' equity(1)
|
6.6 %
|
|
9.0 %
|
|
|
|
7.7 %
|
|
9.3 %
|
|
|
|
Adjusted efficiency
ratio(1)
|
72.0 %
|
|
66.6 %
|
|
|
|
69.9 %
|
|
66.5 %
|
|
|
|
(1)
|
This is a non-GAAP
ratio. For more information, refer to the Non-GAAP Financial and
Other Measures section below and beginning on page 18 of the 2023
Annual Report, including the Management's Discussion and Analysis
(MD&A) for the year ended October 31, 2023, which pages are
incorporated by reference herein. The MD&A is available on
SEDAR+ at www.sedarplus.ca
|
|
(2)
|
This is a supplementary
financial measure. For more information, refer to the Non-GAAP
Financial below and beginning on page 18 of the 2023 Annual Report,
including the MD&A for the year ended October 31, 2023, which
pages are incorporated by reference herein.
|
|
(3)
|
In accordance with the
Office of the Superintendent of Financial Institutions' (OSFI)
"Capital Adequacy Requirements" guideline.
|
|
(4)
|
This is a non-GAAP
financial measure. For more information, refer to the Non-GAAP
Financial and Other Measures below and beginning on page 18 of the
2023 Annual Report, including the MD&A for the year ended
October 31, 2023, which pages are incorporated by reference
herein.
|
Driving Efficiencies Through Simplification
In line with our priorities of becoming a simpler and more
customer-centric organization, we began in December 2023 to simplify our organizational
structure. As a result, restructuring charges of an
estimated $6.5 million (before income taxes) are expected to
be incurred in the first quarter of 2024. We expect these actions
will generate recurring cost savings of an approximate $8 million (before income taxes) on an annual
basis.
Highlights
|
For the three months
ended
|
|
For the year
ended
|
|
In thousands of
dollars, except per share and
percentage amounts (Unaudited)
|
October 31
2023
|
|
July 31
2023
|
|
Variance
|
|
October 31
2022
|
|
Variance
|
|
October 31
2023
|
|
October 31
2022
|
|
Variance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenue
|
$
247,445
|
|
$
260,830
|
|
(5) %
|
|
$
257,142
|
|
(4) %
|
|
$
1,025,510
|
|
$
1,034,235
|
|
(1) %
|
|
Net income
|
$
30,623
|
|
$
49,263
|
|
(38) %
|
|
$
55,650
|
|
(45) %
|
|
$
181,087
|
|
$
226,583
|
|
(20) %
|
|
Adjusted net
income(1)
|
$
44,719
|
|
$
57,646
|
|
(22) %
|
|
$
57,834
|
|
(23) %
|
|
$
208,345
|
|
$
237,078
|
|
(12) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
$
0.67
|
|
$
1.03
|
|
(35) %
|
|
$
1.26
|
|
(47) %
|
|
$
3.89
|
|
$
4.95
|
|
(21) %
|
|
Adjusted diluted
earnings per share(2)
|
$
1.00
|
|
$
1.22
|
|
(18) %
|
|
$
1.31
|
|
(24) %
|
|
$
4.52
|
|
$
5.19
|
|
(13) %
|
|
Return on common
shareholders' equity(2)
|
4.5 %
|
|
6.9 %
|
|
|
|
8.7 %
|
|
|
|
6.6 %
|
|
8.9 %
|
|
|
|
Adjusted return on
common shareholders' equity(2)
|
6.6 %
|
|
8.2 %
|
|
|
|
9.0 %
|
|
|
|
7.7 %
|
|
9.3 %
|
|
|
|
Net interest
margin(3)
|
1.76 %
|
|
1.84 %
|
|
|
|
1.77 %
|
|
|
|
1.79 %
|
|
1.84 %
|
|
|
|
Efficiency
ratio(3)
|
79.7 %
|
|
72.9 %
|
|
|
|
67.7 %
|
|
|
|
73.5 %
|
|
67.8 %
|
|
|
|
Adjusted efficiency
ratio(2)
|
72.0 %
|
|
68.5 %
|
|
|
|
66.6 %
|
|
|
|
69.9 %
|
|
66.5 %
|
|
|
|
Operating
leverage(3)
|
(8.9) %
|
|
(2.7) %
|
|
|
|
0.8 %
|
|
|
|
(8.2) %
|
|
23.5 %
|
|
|
|
Adjusted operating
leverage(2)
|
(4.8) %
|
|
1.7 %
|
|
|
|
0.7 %
|
|
|
|
(5.1) %
|
|
2.6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
position ($ millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and
acceptances
|
$
37,074
|
|
$
36,959
|
|
— %
|
|
$
37,581
|
|
(1) %
|
|
$
37,074
|
|
$
37,581
|
|
(1) %
|
|
Total
assets
|
$
49,893
|
|
$
50,638
|
|
(1) %
|
|
$
50,717
|
|
(2) %
|
|
$
49,893
|
|
$
50,717
|
|
(2) %
|
|
Deposits
|
$
26,027
|
|
$
26,314
|
|
(1) %
|
|
$
27,132
|
|
(4) %
|
|
$
26,027
|
|
$
27,132
|
|
(4) %
|
|
Common shareholders'
equity(2)
|
$
2,617
|
|
$
2,583
|
|
1 %
|
|
$
2,514
|
|
4 %
|
|
$
2,617
|
|
$
2,514
|
|
4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basel III regulatory
capital ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Equity Tier 1
(CET1) capital ratio(4)
|
9.9 %
|
|
9.8 %
|
|
|
|
9.1 %
|
|
|
|
9.9 %
|
|
9.1 %
|
|
|
|
Total risk-weighted
assets ($
millions)(4)
|
$
22,575
|
|
$
22,651
|
|
|
|
$
23,909
|
|
|
|
$
22,575
|
|
$
23,909
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit
quality
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross impaired loans
as a % of loans and acceptances(3)
|
0.62 %
|
|
0.55 %
|
|
|
|
0.42 %
|
|
|
|
0.62 %
|
|
0.42 %
|
|
|
|
Net impaired loans as
a % of loans and acceptances(3)
|
0.46 %
|
|
0.38 %
|
|
|
|
0.28 %
|
|
|
|
0.46 %
|
|
0.28 %
|
|
|
|
Provision for credit
losses as a % of average loans and
acceptances(3)
|
0.18 %
|
|
0.14 %
|
|
|
|
0.19 %
|
|
|
|
0.17 %
|
|
0.16 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common share
information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing share
price(5)
|
$
25.40
|
|
$ 39.73
|
|
(36) %
|
|
$ 30.40
|
|
(16) %
|
|
$ 25.40
|
|
$
30.40
|
|
(16) %
|
|
Price / earnings
ratio (trailing four
quarters)(3)
|
6.5 x
|
|
8.8 x
|
|
|
|
6.1 x
|
|
|
|
6.5 x
|
|
6.1 x
|
|
|
|
Book value per
share(2)
|
$
59.96
|
|
$ 59.30
|
|
1 %
|
|
$ 58.02
|
|
3 %
|
|
$ 59.96
|
|
$
58.02
|
|
3 %
|
|
Dividends declared per
share
|
$
0.47
|
|
$ 0.47
|
|
— %
|
|
$ 0.45
|
|
4 %
|
|
$
1.86
|
|
$
1.78
|
|
4 %
|
|
Dividend
yield(3)
|
7.4 %
|
|
4.7 %
|
|
|
|
5.9 %
|
|
|
|
7.3 %
|
|
5.9 %
|
|
|
|
Dividend payout
ratio(3)
|
69.8 %
|
|
45.8 %
|
|
|
|
35.8 %
|
|
|
|
47.7 %
|
|
35.9 %
|
|
|
|
Adjusted dividend
payout ratio(2)
|
47.1 %
|
|
38.5 %
|
|
|
|
34.4 %
|
|
|
|
41.1 %
|
|
34.2 %
|
|
|
|
(1)
|
This is a non-GAAP
financial measure. For more information, refer to the Non-GAAP
Financial and Other Measures section below and beginning on page 18
of the 2023 Annual Report, including the MD&A for the year
ended October 31, 2023, which pages are incorporated by reference
therein.
|
|
(2)
|
This is a non-GAAP
ratio. For more information, refer to the Non-GAAP Financial and
Other Measures section below and beginning on page 18 of the 2023
Annual Report, including the MD&A for the year ended October
31, 2023, which pages are is incorporated by reference
therein.
|
|
(3)
|
This is a supplementary
financial measure. For more information, refer to the Non-GAAP
Financial and Other Measures section below and beginning on page 18
of the 2023 Annual Report, including the MD&A for the year
ended October 31, 2023, which pages are incorporated by reference
therein.
|
|
(4)
|
In accordance with
OSFI's "Capital Adequacy Requirements" guideline.
|
|
(5)
|
Toronto Stock Exchange
(TSX) closing market price.
|
Non-GAAP Financial and Other Measures
In addition to financial measures based on generally accepted
accounting principles (GAAP), management uses non-GAAP financial
measures to assess the Bank's underlying ongoing business
performance. Non-GAAP financial measures presented throughout this
document are referred to as "adjusted" measures and exclude amounts
designated as adjusting items. Adjusting items include the
amortization of acquisition-related intangible assets, and certain
items of significance that arise from time to time which management
believes are not reflective of underlying business performance.
Non-GAAP financial measures are not standardized financial measures
under the financial reporting framework used to prepare the
financial statements of the Bank and might not be comparable to
similar financial measures disclosed by other issuers. The Bank
believes non-GAAP financial measures are useful to readers in
obtaining a better understanding of how management assesses the
Bank's performance and in analyzing trends.
The following tables show a reconciliation of the non-GAAP
financial measures to their most directly comparable financial
measure that is disclosed in the primary financial statements of
the Bank.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES —
CONSOLIDATED STATEMENT OF INCOME
|
For the three months
ended
|
|
For the year
ended
|
|
In thousands of dollars
(Unaudited)
|
October 31
2023
|
|
July 31
2023
|
|
October 31
2022
|
|
October 31
2023
|
|
October 31
2022
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest
expenses
|
$
197,281
|
|
$ 190,062
|
|
$ 174,147
|
|
$
753,490
|
|
$ 701,661
|
|
|
|
|
|
|
|
|
|
|
|
Less: Adjusting items,
before income taxes
|
|
|
|
|
|
|
|
|
|
|
Amortization of
acquisition-related intangible assets(1)
|
3,230
|
|
3,178
|
|
3,172
|
|
12,839
|
|
12,304
|
|
Restructuring
charges(2)
|
12,544
|
|
5,626
|
|
—
|
|
18,170
|
|
—
|
|
Strategic
review-related charges(3)
|
3,362
|
|
2,567
|
|
(237)
|
|
5,929
|
|
1,828
|
|
19,136
|
|
11,371
|
|
2,935
|
|
36,938
|
|
14,132
|
|
Adjusted
non-interest expenses
|
$
178,145
|
|
$ 178,691
|
|
$ 171,212
|
|
$
716,552
|
|
$ 687,529
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
$
33,495
|
|
$
57,431
|
|
$
65,146
|
|
$
210,413
|
|
$ 275,696
|
|
|
|
|
|
|
|
|
|
|
|
Adjusting items, before
income taxes (detailed above)
|
19,136
|
|
11,371
|
|
2,935
|
|
36,938
|
|
14,132
|
|
Adjusted income
before income taxes
|
$
52,631
|
|
$
68,802
|
|
$
68,081
|
|
$
247,351
|
|
$ 289,828
|
|
|
|
|
|
|
|
|
|
|
|
Reported net
income
|
$
30,623
|
|
$
49,263
|
|
$
55,650
|
|
$
181,087
|
|
$ 226,583
|
|
|
|
|
|
|
|
|
|
|
|
Adjusting items, net of
income taxes
|
|
|
|
|
|
|
|
|
|
|
Amortization of
acquisition-related intangible assets(1)
|
2,401
|
|
2,361
|
|
2,359
|
|
9,541
|
|
9,152
|
|
Restructuring
charges(2)
|
9,223
|
|
4,135
|
|
—
|
|
13,358
|
|
—
|
|
Strategic
review-related charges(3)
|
2,472
|
|
1,887
|
|
(175)
|
|
4,359
|
|
1,343
|
|
14,096
|
|
8,383
|
|
2,184
|
|
27,258
|
|
10,495
|
|
Adjusted net
income
|
$
44,719
|
|
$
57,646
|
|
$
57,834
|
|
$
208,345
|
|
$ 237,078
|
|
|
|
|
|
|
|
|
|
|
|
Net income available
to common shareholders
|
$
29,334
|
|
$
44,662
|
|
$
54,361
|
|
$
169,308
|
|
$ 214,804
|
|
|
|
|
|
|
|
|
|
|
|
Adjusting items, net of
income taxes (detailed above)
|
14,096
|
|
8,383
|
|
2,184
|
|
27,258
|
|
10,495
|
|
Adjusted net income
available to common shareholders
|
$
43,430
|
|
$
53,045
|
|
$
56,545
|
|
$
196,566
|
|
$ 225,299
|
|
(1)
|
Amortization of
acquisition-related intangible assets results from business
acquisitions and is included in the Non-interest expenses line
item.
|
|
(2)
|
In 2023, restructuring
charges resulted from changes in the Bank's management structure
and from the right-sizing of the Bank's Capital Markets franchise.
Restructuring charges were mainly comprised of severance charges
and impairment charges of software and other intangible assets and
were included in the Impairment and restructuring charges
line-item.
|
|
(3)
|
In 2023, strategic
review-related charges resulted from the Bank's review of strategic
options aimed at maximizing shareholder and stakeholder value and
mainly included professional and other fees. In 2022, strategic
review-related charges related to lease contracts following the
completion of the reduction of leased corporate office premises in
Montreal and Toronto, as well as to other updates to estimates
initially recorded in 2021. Strategic review-related charges were
included in the Impairment and restructuring charges
line-item.
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES —
CONSOLIDATED BALANCE SHEET
|
For the three months
ended
|
|
For the year
ended
|
|
In thousands of dollars
(Unaudited)
|
October 31
2023
|
|
July 31
2023
|
|
October 31
2022
|
|
October 31
2023
|
|
October 31
2022
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
$
2,858,820
|
|
$
2,821,415
|
|
$
2,781,103
|
|
$
2,858,820
|
|
$
2,781,103
|
|
|
|
|
|
|
|
|
|
|
|
Plus
(less):
|
|
|
|
|
|
|
|
|
|
|
Preferred
shares
|
(122,071)
|
|
(122,071)
|
|
(122,071)
|
|
(122,071)
|
|
(122,071)
|
|
Limited recourse
capital notes
|
(123,487)
|
|
(123,487)
|
|
(122,332)
|
|
(123,487)
|
|
(122,332)
|
|
Cash flow hedge
reserve(1)
|
3,680
|
|
7,328
|
|
(22,607)
|
|
3,680
|
|
(22,607)
|
|
Common shareholders'
equity
|
$
2,616,942
|
|
$
2,583,185
|
|
$
2,514,093
|
|
$
2,616,942
|
|
$
2,514,093
|
|
|
|
|
|
|
|
|
|
|
|
Impact of averaging
month-end balances(2)
|
(21,997)
|
|
(14,911)
|
|
(32,795)
|
|
(60,518)
|
|
(94,219)
|
|
Average common
shareholders' equity
|
$
2,594,945
|
|
$
2,568,274
|
|
$
2,481,298
|
|
$
2,556,424
|
|
$
2,419,874
|
|
(1) The cash flow hedge
reserve is presented in the Accumulated other comprehensive income
(loss) line item.
|
|
(2) Based on the
month-end balances for the period.
|
Medium-term Financial Targets
In December 2021 the Bank
announced its three-year strategic plan to drive sustainable,
long-term profitable growth. The following table shows the
Bank's medium-term financial targets, and the Bank's performance
for the fiscal years 2022 and 2023. These medium-term financial
targets will be reevaluated in 2024, as further detailed below.
Medium-term Financial Targets
|
Percentage
amounts
|
|
2023
|
|
2022
|
|
Medium-term
financial
targets(1)
|
|
|
|
|
|
|
|
|
Adjusted diluted
earnings per share growth(2)
|
|
(13) %
|
|
14 %
|
|
7% to 10%
|
|
Adjusted return on
common shareholders' equity(2)
|
|
7.7 %
|
|
9.3 %
|
|
>10%
|
|
Adjusted efficiency
ratio(2)
|
|
69.9 %
|
|
66.5 %
|
|
<65%
|
|
Adjusted operating
leverage(2)
|
|
(5.1) %
|
|
2.6 %
|
|
Positive
|
|
(1)
|
These financial targets
were based on management's view of the Bank's fundamentals, taking
into account prudent capital management, a diversified funding
strategy, and sound underwriting standards, as detailed in the
Bank's 2022 Annual Report under the heading "Outlook".
|
|
(2)
|
The financial
objectives are non-GAAP ratios based on non-GAAP financial
measures. Refer to the Non-GAAP Financial and Other Measures
section on page 18 of the 2023 Annual Report for more
information.
|
2023 financial performance summary
In 2023, uncertain and challenging macro-economic conditions
affected the Bank's ability to progress towards its medium-term
financial targets. Net interest margin compression, volatile market
conditions unfavourably impacting financial markets revenues and
higher provisions for credit losses contributed to the lower
financial results compared to fiscal 2022. Non-interest expenses
also increased in 2023 due to inflationary pressures and
investments in technology infrastructure and strategic priorities.
Furthermore, the mainframe outage that occurred in September 2023 had a negative pre-tax impact of
$5.3 million, or $0.09 per share, due to waived service fees and
additional expenses to support remediation. Refer to the Analysis
of Consolidated Results section for further details on the Bank's
financial performance for 2023.
Ensuring the sustained success of the Bank
On October 2, 2023, the Bank
announced that Éric Provost was appointed as President and Chief
Executive Officer. In the coming months, the leadership team will
revamp its strategic plan to ensure the sustained success of
Laurentian Bank. We will focus our efforts on renewing the trust of
loyal customers while driving greater operational efficiency and
refocusing the Bank's core activities to create maximum value for
our customers. As part of this review, the Bank's medium-term
financial objectives will be reevaluated.
Consolidated Results
Three months ended October 31,
2023 financial performance
Net income was $30.6 million and
diluted earnings per share were $0.67 for the fourth quarter
of 2023, compared with $55.7 million and $1.26 for the fourth quarter of 2022. Of
note, reported and adjusted results for the fourth quarter of 2023
included a negative pre-tax impact of $5.3
million ($3.9 million
after income taxes), or $0.09 per
share, from the mainframe outage that occurred in September 2023. Reported results for the fourth
quarter of 2023 also included restructuring and strategic-review
related charges of $15.9 million
($11.7 million after income
taxes), or $0.27 per share, as
further detailed in the Non-GAAP Financial and Other Measures
section. Adjusted net income was $44.7 million and adjusted diluted earnings
per share were $1.00 for the fourth
quarter of 2023, compared with $57.8 million and $1.31 for the fourth quarter of 2022.
Total revenue
Total revenue decreased by $9.7 million to $247.4 million for the fourth quarter of 2023,
compared with $257.1 million
for the fourth quarter of 2022.
Net interest income decreased by $0.9 million to $182.9
million for the fourth quarter of 2023, compared with
$183.8 million for the fourth
quarter of 2022. The decrease was mainly due to higher liquidity
levels and funding costs, partly offset by higher interest income
from commercial loans. The net interest margin was 1.76% for the
fourth quarter of 2023, a decrease of 1 basis point compared with
the fourth quarter of 2022 for the same reasons.
Other income decreased by $8.8 million or 12% to $64.5 million for the fourth quarter of 2023,
compared with $73.3 million for the
fourth quarter of 2022. Unfavourable market conditions impacted
financial markets related revenue in the fourth quarter of 2023,
especially fees and securities brokerage commissions and income
from mutual funds. Of note, monthly service fees for the months of
September and October 2023 totalling
$2.3 million were waived following
the mainframe outage that occurred in September 2023.
Provision for credit losses
The provision for credit losses was $16.7 million for the
fourth quarter of 2023 compared with $17.8
million for the fourth quarter of 2022, an improvement of
$1.2 million reflecting lower
provisions on performing loans due to volume reduction and credit
migration, partly offset by higher provisions on impaired loans.
The provision for credit losses as a percentage of average loans
and acceptances was 18 basis points for the quarter, compared with
19 basis points for the same quarter a year ago. Refer to the
"Credit risk management" section on pages 42 to 48 of the Bank's
MD&A for the year ended October 31,
2023 and to Note 6 to the Consolidated Financial Statements
for more information on provision for credit losses and allowances
for credit losses.
Non-interest expenses
Non-interest expenses amounted to $197.3
million for the fourth quarter of 2023, an increase of
$23.1 million compared with the
fourth quarter of 2022. In the fourth quarter of 2023, non-interest
expenses included restructuring and strategic-review related
charges of $15.9 million; refer
to the Non-GAAP Financial and Other Measures section for further
details. Adjusted non-interest expenses increased by $6.9 million or 4% to $178.1 million for the fourth quarter of 2023,
compared with $171.2 million for
the fourth quarter of 2022.
Salaries and employee benefits amounted to
$88.3 million for the fourth quarter
of 2023, a decrease of $1.3 million
compared with the fourth quarter of 2022, mostly due to lower
performance-based compensation. This was partly offset by salary
increases and talent acquisition to invest in strategic priorities
and to continue our focus on improving the customer experience.
Salaries and employee benefits for the fourth quarter of 2023 also
included $0.5 million of additional
expenses to support remediation efforts following the mainframe
outage that occurred in September
2023.
Premises and technology costs were $51.8 million for the fourth quarter of 2023, an
increase of $4.8 million compared
with the fourth quarter of 2022. The increase year-over-year is
mainly due to higher technology costs as the Bank is investing in
its infrastructure and strategic priorities, as well as increased
amortization charges resulting from recently completed
projects.
Other non-interest expenses were $41.3 million for the fourth quarter of 2023, an
increase of $3.5 million compared
with the fourth quarter of 2022 mainly resulting from higher
advertising, business development and travel expenses. Other
non-interest expenses for the fourth quarter of 2023 also included
$2.5 million of professional fees and
other expenses related to the mainframe outage that occurred in
September 2023.
Impairment and restructuring charges were
$15.9 million for the fourth quarter
of 2023, compared with negative $0.2
million for the fourth quarter of 2022. In the fourth
quarter of 2023, this line-item included restructuring charges of
$12.5 million resulting from
changes in the Bank's management structure, as well as strategic
review-related charges of $3.4 million resulting from the Bank's
review of strategic options aimed at maximizing shareholder and
stakeholder value. In the fourth quarter of 2022, this line-item
included net charges mainly related to lease contracts following
the completion of the reduction of leased corporate office
premises, as well as to other updates to estimates initially
recorded in the prior year. Refer to the Non-GAAP Financial
Measures and Other Measures section for further details.
Efficiency ratio
The efficiency ratio on a reported basis was 79.7% for the
fourth quarter of 2023, compared with 67.7% for the fourth quarter
of 2022. The increase year-over-year is mainly due to the
restructuring and strategic-review related charges incurred in the
fourth quarter of 2023. The adjusted efficiency ratio was 72.0% for
the fourth quarter of 2023, compared to 66.6% for the fourth
quarter of 2022 mainly as a result of investments in strategic
priorities and due to the combined $5.3
million negative impact of the mainframe outage on other
revenues and non-interest expenses, as further detailed above.
Income taxes
For the fourth quarter of 2023, the income tax expense was
$2.9 million, and the effective
income tax rate was 8.6%, compared with an income tax expense of
$9.5 million, and an effective
income tax rate of 14.6% for the fourth quarter of 2022. For
both quarters, the lower effective income tax rate compared to the
statutory income tax rate was mainly attributed to the lower
taxation level of income from foreign operations. The lower
effective income tax rate for the fourth quarter of 2023 compared
with the fourth quarter of 2022 mainly resulted from the higher
proportion of income from foreign operations.
Three months ended October 31,
2023 compared with three months ended July 31, 2023
Net income was $30.6 million and
diluted earnings per share were $0.67
for the fourth quarter of 2023, compared with $49.3 million and $1.03 for the third quarter of 2023. Of
note, reported and adjusted results for the fourth quarter of 2023
included a negative pre-tax impact of $5.3
million ($3.9 million
after income taxes), or $0.09 per
share, from the mainframe outage that occurred in September 2023. Reported results for the fourth
quarter of 2023 also included restructuring and strategic-review
related charges of $15.9 million
($11.7 million after income
taxes), or $0.27 per share, as
further detailed in the Non-GAAP Financial and Other Measures
section. Adjusted net income was $44.7 million and adjusted diluted earnings
per share were $1.00 for the
fourth quarter of 2023, compared with $57.6 million and $1.22 for the third quarter of 2023.
Total revenue decreased by $13.4
million to $247.4 million for
the fourth quarter of 2023 compared with $260.8 million for the previous quarter.
Net interest income decreased by $9.2 million sequentially to $182.9 million. The decrease was mainly
due to lower interest income from commercial loans and higher
liquidity levels. Net interest margin was 1.76% for the fourth
quarter of 2023, a decrease of 8 basis points compared with 1.84%
for the third quarter of 2023 mainly for the same reasons.
Other income amounted to $64.5
million for the fourth quarter of 2023, a decrease of
$4.2 million compared with
$68.7 million for the previous
quarter. Of note, monthly service fees for the months of September
and October 2023 totalling
approximately $2.3 million were
waived following the mainframe outage that occurred in September 2023. Unfavourable market conditions
also impacted financial markets related revenue in the fourth
quarter of 2023, especially income from financial instruments and
income from mutual funds.
The provision for credit losses was $16.7
million for the fourth quarter of 2023, an increase of
$3.3 million compared with
$13.3 million for the third
quarter of 2023, mainly reflecting higher provisions on impaired
loans.
Non-interest expenses increased by $7.2
million to $197.3 million for
the fourth quarter of 2023 from $190.1
million in the third quarter of 2023. In the fourth quarter
of 2023, non-interest expenses included restructuring and
strategic-review related charges of $15.9
million compared to $8.2
million for the previous quarter; refer to the Non-GAAP
Financial and Other Measures section for further details.
Non-interest expenses for the fourth quarter of 2023 also included
$3.0 million of additional expenses
to support remediation following the mainframe outage that occurred
in September 2023. Adjusted
non-interest expenses decreased by $0.5 million to $178.1 million in the fourth quarter of 2023
mainly due to sequentially lower performance-based compensation,
partly offset by higher professional fees, advertising and other
expenses.
Financial Condition
As at October 31, 2023, total assets amounted to
$49.9 billion, a 2% decrease compared
with $50.7 billion as at
October 31, 2022.
Liquid assets
As at October 31, 2023, liquid assets as presented on the
balance sheet amounted to $11.4
billion, a decrease of $0.4
billion compared with $11.8
billion as at October 31, 2022.
The Bank continues to prudently manage its level of liquid
assets. The Bank's funding sources remain well diversified and
sufficient to meet all liquidity requirements. Liquid assets
represented 23% of total assets as at October 31, 2023, in
line with October 31, 2022.
Loans
Loans and bankers' acceptances, net of allowances, stood at
$36.9 billion as at
October 31, 2023, a decrease of $0.5 billion since October 31,
2022. In 2023, the decrease in personal and commercial loans
was partly offset by an increase in residential mortgage loans.
Commercial loans and acceptances amounted to $17.8 billion as at October 31, 2023, a
decrease of $0.4 billion or 2%
since October 31, 2022. The decrease resulted mainly from
lower inventory financing volumes and other commercial loans.
Personal loans of $2.6 billion
as at October 31, 2023 decreased by $0.7 billion from October 31, 2022,
mainly as a result of a decline in the investment loan portfolio
driven by volatile market conditions. Residential mortgage loans of
$16.7 billion as at October 31,
2023 increased by $0.6 billion
or 3% from October 31, 2022.
Deposits
Deposits decreased by $1.1 billion to $26.0
billion as at October 31, 2023 compared with
$27.1 billion as at October 31,
2022. Personal deposits stood at $22.3
billion as at October 31, 2023, an increase of
$0.1 billion compared with
$22.2 billion as at
October 31, 2022. Of note, personal deposits sourced through
the retail channel increased by $0.2
billion or 3% compared with October 31, 2022. Personal
notice and demand deposits from partnerships were mainly unchanged
since October 31, 2022, and deposits
from advisors and brokers decreased by $0.3
billion. Personal deposits represented 86% of total deposits
as at October 31, 2023, compared with 82% as at
October 31, 2022, and contributed to the Bank's sound
liquidity position. Business and other deposits decreased by
$1.2 billion over the same period to
$3.7 billion, partly offset by an
increase in cost-effective long-term debt related to securitization
activities, as detailed below.
Debt related to securitization activities
Debt related to securitization activities increased by
$0.7 billion or 5% compared with
October 31, 2022 and stood at $12.9 billion as at October 31, 2023.
During the year, new issuances of cost-effective long-term debt
related to securitization activities more than offset maturities of
liabilities, as well as normal repayments. For additional
information on the Bank's securitization activities, please refer
to Notes 7 and 13 to the Consolidated Financial Statements.
Shareholders' equity and regulatory capital
Shareholders' equity stood at $2.9
billion as at October 31, 2023 and increased by
$77.7 million compared with
October 31, 2022. Retained earnings increased by $84.1 million compared to October 31, 2022,
mainly as a result of the net income contribution of $181.1 million, partly offset by dividends.
For additional information, please refer to the Capital Management
section of the Bank's MD&A and to the Consolidated Statement of
Changes in Shareholders' Equity for the period ended
October 31, 2023.
The Bank's book value per common share was $59.96 as at
October 31, 2023 compared to $58.02 as at October 31, 2022.
The CET1 capital ratio was 9.9% as at October 31, 2023, in
excess of the minimum regulatory requirement and the Bank's target
management levels. The CET1 capital ratio increased by 8 basis
points compared with October 31, 2022 due to the risk-weighted
assets reduction and internal capital generation. The Bank met
OSFI's capital and leverage requirements throughout
the year.
On December 6, 2023, the Board of Directors declared a
quarterly dividend of $0.47 per
common share, payable on February 1, 2024, to shareholders of
record on January 3, 2024. This quarterly dividend is equal to
the dividend declared in the previous quarter and is 4% higher
compared with the dividend declared in the previous year. The Board
also determined that shares attributed under the Bank's Shareholder
Dividend Reinvestment and Share Purchase Plan will be made in
common shares issued from Corporate Treasury with a 2%
discount.
Condensed Interim Consolidated Financial Statements
(unaudited)
Consolidated Balance Sheet
|
In thousands of dollars
(Unaudited)
|
As at October
31
2023
|
|
As at October
31
2022
|
|
|
|
|
|
Assets
|
|
|
|
|
Cash and
non-interest bearing deposits with banks
|
$
69,438
|
|
$
79,702
|
|
Interest-bearing
deposits with banks
|
1,250,827
|
|
1,811,221
|
|
Securities
|
|
|
|
|
At amortized
cost
|
2,995,177
|
|
3,004,405
|
|
At fair value through
profit or loss (FVTPL)
|
2,970,860
|
|
2,993,434
|
|
At fair value through
other comprehensive income (FVOCI)
|
50,390
|
|
186,622
|
|
6,016,427
|
|
6,184,461
|
|
Securities purchased
under reverse repurchase agreements
|
4,086,170
|
|
3,727,752
|
|
Loans
|
|
|
|
|
Personal
|
2,571,747
|
|
3,266,635
|
|
Residential
mortgage
|
16,708,809
|
|
16,157,480
|
|
Commercial
|
17,778,794
|
|
18,057,146
|
|
Customers' liabilities
under acceptances
|
15,000
|
|
99,800
|
|
37,074,350
|
|
37,581,061
|
|
Allowances for loan
losses
|
(205,957)
|
|
(193,476)
|
|
36,868,393
|
|
37,387,585
|
|
Other
|
|
|
|
|
Derivatives
|
325,219
|
|
312,538
|
|
Premises and
equipment
|
113,340
|
|
121,227
|
|
Goodwill
|
84,755
|
|
83,710
|
|
Software and other
intangible assets
|
282,831
|
|
294,438
|
|
Deferred tax
assets
|
119,085
|
|
71,533
|
|
Other
assets
|
676,968
|
|
642,591
|
|
1,602,198
|
|
1,526,037
|
|
$
49,893,453
|
|
$
50,716,758
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
Deposits
|
|
|
|
|
Personal
|
$
22,294,040
|
|
$
22,234,036
|
|
Business, banks and
other
|
3,732,838
|
|
4,897,770
|
|
26,026,878
|
|
27,131,806
|
|
Other
|
|
|
|
|
Obligations related to
securities sold short
|
2,584,071
|
|
3,221,358
|
|
Obligations related to
securities sold under repurchase agreements
|
3,118,708
|
|
2,924,295
|
|
Acceptances
|
15,000
|
|
99,800
|
|
Derivatives
|
738,041
|
|
808,958
|
|
Deferred tax
liabilities
|
72,344
|
|
54,255
|
|
Other
liabilities
|
1,288,526
|
|
1,166,208
|
|
7,816,690
|
|
8,274,874
|
|
Debt related to
securitization activities
|
12,853,385
|
|
12,192,422
|
|
Subordinated
debt
|
337,680
|
|
336,553
|
|
Shareholders'
equity
|
|
|
|
|
Preferred
shares
|
122,071
|
|
122,071
|
|
Limited recourse
capital notes
|
123,487
|
|
122,332
|
|
Common
shares
|
1,177,827
|
|
1,167,549
|
|
Retained
earnings
|
1,406,515
|
|
1,322,381
|
|
Accumulated other
comprehensive income
|
22,868
|
|
42,045
|
|
Share-based
compensation reserve
|
6,052
|
|
4,725
|
|
2,858,820
|
|
2,781,103
|
|
$
49,893,453
|
|
$
50,716,758
|
Consolidated Statement of Income
|
For the three months
ended
|
|
For the year
ended
|
|
In thousands of
dollars, except per share amounts (Unaudited)
|
October 31
2023
|
|
July 31
2023
|
|
October 31
2022
|
|
October 31
2023
|
|
October 31
2022
|
|
|
|
|
|
|
|
|
|
|
|
Interest and
dividend income
|
|
|
|
|
|
|
|
|
|
|
Loans
|
$ 540,730
|
|
$ 538,561
|
|
$ 424,369
|
|
$
2,088,490
|
|
$
1,336,332
|
|
Securities
|
26,106
|
|
23,125
|
|
21,454
|
|
94,289
|
|
60,792
|
|
Deposits with
banks
|
19,124
|
|
17,786
|
|
8,582
|
|
67,784
|
|
14,462
|
|
Other, including
derivatives
|
7,399
|
|
5,077
|
|
8,775
|
|
22,590
|
|
62,772
|
|
593,359
|
|
584,549
|
|
463,180
|
|
2,273,153
|
|
1,474,358
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
264,952
|
|
251,749
|
|
175,283
|
|
969,382
|
|
467,810
|
|
Debt related to
securitization activities
|
87,079
|
|
83,225
|
|
62,537
|
|
318,760
|
|
207,183
|
|
Subordinated
debt
|
4,589
|
|
4,590
|
|
4,598
|
|
18,212
|
|
20,486
|
|
Other, including
derivatives
|
53,843
|
|
52,859
|
|
36,938
|
|
220,476
|
|
45,543
|
|
410,463
|
|
392,423
|
|
279,356
|
|
1,526,830
|
|
741,022
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
182,896
|
|
192,126
|
|
183,824
|
|
746,323
|
|
733,336
|
|
|
|
|
|
|
|
|
|
|
|
Other
income
|
|
|
|
|
|
|
|
|
|
|
Lending
fees
|
16,837
|
|
16,874
|
|
17,356
|
|
66,788
|
|
69,068
|
|
Income from mutual
funds
|
10,320
|
|
10,889
|
|
11,087
|
|
43,255
|
|
48,022
|
|
Fees and securities
brokerage commissions
|
9,586
|
|
9,300
|
|
13,105
|
|
40,529
|
|
50,652
|
|
Card service
revenues
|
6,923
|
|
6,717
|
|
8,760
|
|
29,722
|
|
28,834
|
|
Income from financial
instruments
|
4,935
|
|
6,728
|
|
4,289
|
|
27,961
|
|
31,771
|
|
Service
charges
|
4,818
|
|
7,042
|
|
7,334
|
|
25,963
|
|
29,815
|
|
Fees on investment
accounts
|
3,161
|
|
3,270
|
|
3,304
|
|
13,008
|
|
14,094
|
|
Insurance income,
net
|
1,834
|
|
2,275
|
|
2,094
|
|
7,940
|
|
8,978
|
|
Other
|
6,135
|
|
5,609
|
|
5,989
|
|
24,021
|
|
19,665
|
|
64,549
|
|
68,704
|
|
73,318
|
|
279,187
|
|
300,899
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenue
|
247,445
|
|
260,830
|
|
257,142
|
|
1,025,510
|
|
1,034,235
|
|
|
|
|
|
|
|
|
|
|
|
Provision for credit
losses
|
16,669
|
|
13,337
|
|
17,849
|
|
61,607
|
|
56,878
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest
expenses
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
88,286
|
|
98,640
|
|
89,595
|
|
391,544
|
|
386,157
|
|
Premises and
technology
|
51,789
|
|
49,224
|
|
47,008
|
|
196,628
|
|
179,946
|
|
Other
|
41,300
|
|
34,005
|
|
37,781
|
|
141,219
|
|
133,730
|
|
Impairment and
restructuring charges
|
15,906
|
|
8,193
|
|
(237)
|
|
24,099
|
|
1,828
|
|
197,281
|
|
190,062
|
|
174,147
|
|
753,490
|
|
701,661
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
33,495
|
|
57,431
|
|
65,146
|
|
210,413
|
|
275,696
|
|
Income taxes
|
2,872
|
|
8,168
|
|
9,496
|
|
29,326
|
|
49,113
|
|
Net
income
|
$
30,623
|
|
$
49,263
|
|
$
55,650
|
|
$ 181,087
|
|
$ 226,583
|
|
|
|
|
|
|
|
|
|
|
|
Preferred share
dividends and limited recourse capital note interest
|
1,289
|
|
4,601
|
|
1,289
|
|
11,779
|
|
11,779
|
|
|
|
|
|
|
|
|
|
|
|
Net income available
to common shareholders
|
$
29,334
|
|
$
44,662
|
|
$
54,361
|
|
$ 169,308
|
|
$ 214,804
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
0.67
|
|
$
1.03
|
|
$
1.26
|
|
$
3.89
|
|
$
4.96
|
|
Diluted
|
$
0.67
|
|
$
1.03
|
|
$
1.26
|
|
$
3.89
|
|
$
4.95
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per common
share
|
$
0.47
|
|
$
0.47
|
|
$
0.45
|
|
$
1.86
|
|
$
1.78
|
Consolidated Statement of Comprehensive Income
|
For the three months
ended
|
|
For the year
ended
|
|
In thousands of dollars
(Unaudited)
|
October 31
2023
|
|
July 31
2023
|
|
October 31
2022
|
|
October 31
2023
|
|
October 31
2022
|
|
Net
income
|
$
30,623
|
|
$
49,263
|
|
$
55,650
|
|
$
181,087
|
|
$
226,583
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income (loss), net of income taxes
|
|
|
|
|
|
|
|
|
|
|
Items that may
subsequently be reclassified to the Statement of Income
|
|
|
|
|
|
|
|
|
|
|
Net change in debt
securities at FVOCI
|
|
|
|
|
|
|
|
|
|
|
Unrealized net gains
(losses) on debt securities at FVOCI
|
(12)
|
|
(26)
|
|
(334)
|
|
44
|
|
(1,432)
|
|
Reclassification of
net (gains) losses on debt securities at FVOCI to
net
income
|
40
|
|
(31)
|
|
132
|
|
313
|
|
532
|
|
28
|
|
(57)
|
|
(202)
|
|
357
|
|
(900)
|
|
Net change in value of
derivatives designated as cash flow hedges
|
3,648
|
|
(39,919)
|
|
(8,904)
|
|
(26,287)
|
|
(19,488)
|
|
Net foreign currency
translation adjustments
|
|
|
|
|
|
|
|
|
|
|
Net unrealized foreign
currency translation gains (losses) on
investments in foreign operations
|
61,026
|
|
(31,407)
|
|
51,301
|
|
23,589
|
|
68,662
|
|
Net gains (losses) on
hedges of investments in foreign operations
|
(37,980)
|
|
19,319
|
|
(23,495)
|
|
(16,836)
|
|
(29,763)
|
|
23,046
|
|
(12,088)
|
|
27,806
|
|
6,753
|
|
38,899
|
|
26,722
|
|
(52,064)
|
|
18,700
|
|
(19,177)
|
|
18,511
|
|
|
|
|
|
|
|
|
|
|
|
Items that may not
subsequently be reclassified to the Statement of
Income
|
|
|
|
|
|
|
|
|
|
|
Remeasurement gains
(losses) on employee benefit plans
|
(374)
|
|
187
|
|
5,568
|
|
(2,414)
|
|
16,852
|
|
Net losses on equity
securities designated at FVOCI
|
(24)
|
|
(589)
|
|
(8,924)
|
|
(1,833)
|
|
(20,802)
|
|
(398)
|
|
(402)
|
|
(3,356)
|
|
(4,247)
|
|
(3,950)
|
|
Total other
comprehensive income (loss), net of income taxes
|
26,324
|
|
(52,466)
|
|
15,344
|
|
(23,424)
|
|
14,561
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
(loss)
|
$
56,947
|
|
$ (3,203)
|
|
$
70,994
|
|
$
157,663
|
|
$
241,144
|
Income Taxes — Other Comprehensive Income
The
following table shows income tax expense (recovery) for each
component of other comprehensive income.
|
For the three months
ended
|
|
For the year
ended
|
|
In thousands of dollars
(Unaudited)
|
October 31
2023
|
|
July 31
2023
|
|
October 31
2022
|
|
October 31
2023
|
|
October 31
2022
|
|
|
|
|
|
|
|
|
|
|
|
Net change in debt
securities at FVOCI
|
|
|
|
|
|
|
|
|
|
|
Unrealized net gains
(losses) on debt securities at FVOCI
|
$
(4)
|
|
$
(10)
|
|
$
(121)
|
|
$
16
|
|
$
(516)
|
|
Reclassification of
net (gains) losses on debt securities at FVOCI to
net
income
|
14
|
|
(10)
|
|
48
|
|
113
|
|
192
|
|
10
|
|
(20)
|
|
(73)
|
|
129
|
|
(324)
|
|
|
|
|
|
|
|
|
|
|
|
Net change in value of
derivatives designated as cash flow hedges
|
1,315
|
|
(14,374)
|
|
(3,207)
|
|
(9,464)
|
|
(7,022)
|
|
Net foreign currency
translation adjustments
|
|
|
|
|
|
|
|
|
|
|
Net gains (losses) on
hedges of investments in foreign operations
|
165
|
|
50
|
|
230
|
|
4
|
|
262
|
|
Remeasurement gains
(losses) on employee benefit plans
|
(134)
|
|
67
|
|
2,005
|
|
(869)
|
|
6,068
|
|
Net losses on equity
securities designated at FVOCI
|
465
|
|
(212)
|
|
(3,218)
|
|
(187)
|
|
(7,976)
|
|
$
1,821
|
|
$
(14,489)
|
|
$ (4,263)
|
|
$
(10,387)
|
|
$ (8,992)
|
Consolidated Statement of Changes in Shareholders'
Equity
|
For the year ended
October 31, 2023
|
|
|
|
|
|
Accumulated other
comprehensive income
|
Share-
based
compen-
sation
reserve
|
Total
shareholders'
equity
|
|
In thousands of dollars
(Unaudited)
|
Preferred
shares
|
Limited
Recourse
Capital
Notes
|
Common
shares
|
Retained
earnings
|
Debt
securities
at FVOCI
|
Cash
flow
hedges
|
Translation
of foreign
operations
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at October
31, 2022
|
$
122,071
|
$
122,332
|
$
1,167,549
|
$
1,322,381
|
$
(622)
|
$
22,607
|
$
20,060
|
$
42,045
|
$
4,725
|
$ 2,781,103
|
|
Net income
|
|
|
|
181,087
|
|
|
|
|
|
181,087
|
|
Other comprehensive
income (loss), net of income taxes
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized net gains on
debt securities at FVOCI
|
|
|
|
|
44
|
|
|
44
|
|
44
|
|
Reclassification of net
losses on debt securities at FVOCI to net income
|
|
|
|
|
313
|
|
|
313
|
|
313
|
|
Net change in value of
derivatives designated as cash flow hedges
|
|
|
|
|
|
(26,287)
|
|
(26,287)
|
|
(26,287)
|
|
Net unrealized foreign
currency translation gains on investments
in foreign operations
|
|
|
|
|
|
|
23,589
|
23,589
|
|
23,589
|
|
Net losses on hedges of
investments in foreign operations
|
|
|
|
|
|
|
(16,836)
|
(16,836)
|
|
(16,836)
|
|
Remeasurement losses on
employee benefit plans
|
|
|
|
(2,414)
|
|
|
|
|
|
(2,414)
|
|
Net losses on equity
securities designated at FVOCI
|
|
|
|
(1,833)
|
|
|
|
|
|
(1,833)
|
|
Comprehensive
income
|
|
|
|
176,840
|
357
|
(26,287)
|
6,753
|
(19,177)
|
|
157,663
|
|
Net sale of treasury
limited recourse capital notes
|
|
1,155
|
|
(117)
|
|
|
|
|
|
1,038
|
|
Issuance of common
shares
|
|
|
10,278
|
|
|
|
|
|
|
10,278
|
|
Share-based
compensation
|
|
|
|
|
|
|
|
|
1,327
|
1,327
|
|
Dividends and
other
|
|
|
|
|
|
|
|
|
|
|
|
Preferred shares and
limited recourse capital notes
|
|
|
|
(11,779)
|
|
|
|
|
|
(11,779)
|
|
Common
shares
|
|
|
|
(80,810)
|
|
|
|
|
|
(80,810)
|
|
Balance as at October
31, 2023
|
$
122,071
|
$
123,487
|
$
1,177,827
|
$
1,406,515
|
$
(265)
|
$
(3,680)
|
$
26,813
|
$
22,868
|
$
6,052
|
$ 2,858,820
|
|
For the year ended
October 31, 2022
|
|
|
|
|
|
Accumulated other
comprehensive income
|
Share-
based
compen-
sation
reserve
|
Total
shareholders'
equity
|
|
In thousands of dollars
(Unaudited)
|
Preferred
shares
|
Limited
recourse
capital
notes
|
Common
shares
|
Retained
earnings
|
Debt
securities
at FVOCI
|
Cash
flow
hedges
|
Translation
of foreign
operations
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at October
31, 2021
|
$
122,071
|
$
123,612
|
$ 1,172,722
|
$ 1,195,264
|
$
278
|
$
42,095
|
$ (18,839)
|
$
23,534
|
$ 3,667
|
$ 2,640,870
|
|
Net income
|
|
|
|
226,583
|
|
|
|
|
|
226,583
|
|
Other comprehensive
income, net of income taxes
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized net losses
on debt securities at FVOCI
|
|
|
|
|
(1,432)
|
|
|
(1,432)
|
|
(1,432)
|
|
Reclassification of net
losses on debt securities at FVOCI to net income
|
|
|
|
|
532
|
|
|
532
|
|
532
|
|
Net change in value of
derivatives designated as cash flow hedges
|
|
|
|
|
|
(19,488)
|
|
(19,488)
|
|
(19,488)
|
|
Net unrealized foreign
currency translation gains on investments in foreign
operations
|
|
|
|
|
|
|
68,662
|
68,662
|
|
68,662
|
|
Net losses on hedges of
investments in foreign operations
|
|
|
|
|
|
|
(29,763)
|
(29,763)
|
|
(29,763)
|
|
Remeasurement gains on
employee benefit plans
|
|
|
|
16,852
|
|
|
|
|
|
16,852
|
|
Net losses on equity
securities designated at FVOCI
|
|
|
|
(20,802)
|
|
|
|
|
|
(20,802)
|
|
Comprehensive
income
|
|
|
|
222,633
|
(900)
|
(19,488)
|
38,899
|
18,511
|
|
241,144
|
|
Net purchase of
treasury limited recourse capital notes
|
|
(1,280)
|
|
(203)
|
|
|
|
|
|
(1,483)
|
|
Issuance of common
shares
|
|
|
5,622
|
|
|
|
|
|
|
5,622
|
|
Repurchase of common
shares for cancellation
|
|
|
(10,795)
|
(6,419)
|
|
|
|
|
|
(17,214)
|
|
Share-based
compensation
|
|
|
|
|
|
|
|
|
1,058
|
1,058
|
|
Dividends and
other
|
|
|
|
|
|
|
|
|
|
|
|
Preferred shares and
limited recourse capital notes
|
|
|
|
(11,779)
|
|
|
|
|
|
(11,779)
|
|
Common
shares
|
|
|
|
(77,115)
|
|
|
|
|
|
(77,115)
|
|
Balance as at October
31, 2022
|
$
122,071
|
$
122,332
|
$ 1,167,549
|
$ 1,322,381
|
$
(622)
|
$
22,607
|
$ 20,060
|
$
42,045
|
$ 4,725
|
$ 2,781,103
|
Caution Regarding Forward-Looking Statements
From time to time, Laurentian Bank of Canada and, as applicable its subsidiaries
(collectively referred to as the Bank) will make written or
oral forward-looking statements within the meaning of applicable
Canadian and United States
(U.S.) securities legislation, including, forward-looking
statements contained in the Bank's 2023 Annual Report (2023
Annual Report), the Management's Discussion and Analysis (the
MD&A) for the fiscal year ended October 31, 2023 and in the documents
incorporated by reference herein as well as in other documents
filed with Canadian and U.S. regulatory authorities, in reports to
shareholders, and in other written or oral communications. These
forward-looking statements are made in accordance with the "safe
harbor" provisions of, and are intended to be forward-looking
statements in accordance with, applicable Canadian and U.S.
securities legislation. They include, but are not limited to,
statements regarding the Bank's vision, strategic goals, business
plans and strategies, priorities and financial performance
objectives; the economic, market, and regulatory review and outlook
for Canadian, U.S. and global economies; the regulatory environment
in which the Bank operates; the risk environment, including, credit
risk, liquidity, and funding risks; the statements under the
heading "Risk Appetite and Risk Management Framework" contained in
the 2023 Annual Report, including, the MD&A for the fiscal year
ended October 31, 2023, and other
statements that are not historical facts .
Forward-looking statements typically are identified with words
or phrases such as "believe", "assume", "estimate", "forecast",
"outlook", "project", "vision", "expect", "foresee", "anticipate",
"intend", "plan", "goal", "aim", "target", and expressions of
future or conditional verbs such as "may", "should", "could",
"would", "will", "intend" or the negative of any of these terms,
variations thereof or similar terminology.
By their very nature, forward-looking statements require the
Bank to make assumptions and are subject to inherent risks and
uncertainties, both general and specific in nature, which give rise
to the possibility that the Bank's predictions, forecasts,
projections, expectations, or conclusions may prove to be
inaccurate; that the Bank's assumptions may be incorrect (in whole
or in part); and that the Bank's financial performance objectives,
visions, and strategic goals may not be achieved. Forward-looking
statements should not be read as guarantees of future performance
or results, or indications of whether or not actual results will be
achieved. Material economic assumptions underlying such
forward-looking statements are set out in the 2023 Annual Report
under the heading "Outlook", which assumptions are incorporated by
reference herein.
The Bank cautions readers against placing undue reliance on
forward-looking statements, as a number of factors, many of which
are beyond the Bank's control and the effects of which can be
difficult to predict or measure, could influence, individually or
collectively, the accuracy of the forward-looking statements and
cause the Bank's actual future results to differ significantly from
the targets, expectations, estimates or intentions expressed in the
forward-looking statements. These factors include, but are not
limited to general and market economic conditions; inflationary
pressures; the dynamic nature of the financial services industry in
Canada, the U.S., and globally;
risks relating to credit, market, liquidity, funding, insurance,
operational and regulatory compliance (which could lead to the Bank
being subject to various legal and regulatory proceedings, the
potential outcome of which could include regulatory restrictions,
penalties, and fines); reputational risks; legal and regulatory
risks; competitive and systemic risks; supply chain disruptions;
geopolitical events and uncertainties; government sanctions;
conflict, war, or terrorism; and various other significant risks
discussed in the risk-related portions of the Bank's 2023 Annual
Report, such as those related to: Canadian and global economic
conditions (including the risk of higher inflation and rising
interest rates); Canadian housing and household indebtedness;
technology, information systems and cybersecurity; technological
disruption, privacy, data and third party related risks;
competition; the Bank's ability to execute on its strategic
objectives; digital disruption and innovation (including, emerging
fintech competitors); changes in government fiscal, monetary and
other policies; tax risk and transparency; fraud and
criminal activity; human capital; business continuity; emergence of
widespread health emergencies or public health crises;
environmental and social risks including, climate change; and
various other significant risks, as described beginning on page 38
of the 2023 Annual Report, including the MD&A, which
information is incorporated by reference herein. The Bank further
cautions that the foregoing list of factors is not exhaustive. When
relying on the Bank's forward-looking statements to make decisions
involving the Bank, investors, financial analysts, and others
should carefully consider the foregoing factors, uncertainties, and
current and potential events.
Any forward-looking statements contained herein or incorporated
by reference represent the views of management of the Bank only as
at the date such statements were or are made, are presented for the
purposes of assisting investors, financial analysts, and others in
understanding certain key elements of the Bank's financial
position, current objectives, strategic priorities, expectations
and plans, and in obtaining a better understanding of the Bank's
business and anticipated financial performance and operating
environment and may not be appropriate for other purposes. The Bank
does not undertake any obligation to update any forward-looking
statements made by the Bank or on its behalf whether as a result of
new information, future events or otherwise, except to the extent
required by applicable securities legislation. Additional
information relating to the Bank can be located on SEDAR+ at
www.sedarplus.ca.
Access to Quarterly Results Materials
This press release can be found on the Bank's website at
www.lbcfg.ca, under the Press Room tab, and the Bank's Report to
Shareholders, Investor Presentation and Supplementary Financial
Information under the Investor Centre tab, Financial Results.
Conference Call
Laurentian Bank of Canada
invites media representatives and the public to listen to the
conference call to be held at 9:00 a.m. (ET) on
December 7, 2023. The live, listen-only, toll-free, call-in
number is 1-888-664-6392, code 71576346. A live webcast will
also be available on the Bank's website under the Investor Centre
tab, Financial Results.
The conference call playback will be available on a delayed
basis from 12:00 p.m. (ET) on
December 7, 2023, until 12:00 p.m. (ET) on February
7, 2024, on our website under the Investor Centre tab, Financial
Results.
The presentation material referenced during the call will be
available on our website under the Investor Centre tab, Financial
Results.
About Laurentian Bank of Canada
At Laurentian Bank, we believe we can change banking for the
better. By seeing beyond numbers.
Founded in Montréal in 1846, Laurentian Bank helps families,
businesses and communities thrive. Today, we have approximately
3,000 employees working together as one team, to provide a broad
range of financial services and advice-based solutions for
customers across Canada and
the United States. We protect,
manage and grow $49.9 billion in
balance sheet assets and $25.8 billion in assets under
administration.
We drive results by placing our customers first, making the
better choice, acting courageously, and believing everyone
belongs.
SOURCE Laurentian Bank of Canada