The year-end financial performance of the Laurentian bank disclosed Thursday morning was lower than expected, particularly weighed down by a computer failure that occurred in late September.
Adjusted earnings per share generated in the months of August, September and October were $1, compared to analysts’ estimates of $1.16. Costs related to handling the disruption had a negative impact of 9 cents on adjusted earnings per share.
A year ago, adjusted earnings per share were $1.31. The bank posted an adjusted net profit of 44.7 million in the quarter, up from 57.8 million a year ago.
Revenue was down 9.7 million to 247 million compared to the same period last year. 262 million were expected by analysts.
“We are currently working to rationalize the bank’s operations and thoroughly review our strategic plan to focus on serving our clients and remain a strong Quebec institution,” commented new president and CEO, Eric Provost.
Laurentienne has been directed by Eric Provost since early October. He replaces Rania Llewellyn. A management change affected operations due to central system disruption and the bank ruled out a sale, shortly after announcing the end of its review of strategic options.
The bank indicated that the outage occurred during a planned IT maintenance operation.
The bank’s management also said it had started simplifying its organizational structure in December. The bank therefore plans to record a restructuring charge of 6.5 million for the current quarter ending in late January.
The Bank estimates that the measures taken will generate recurring savings of around Rs 8 crore on an annual basis.
“At first glance, Laurentian had a tough year-end quarter, falling short of expectations on several fronts,” commented Mike Rizvanovic, an analyst at the firm Keefe, Bruyette & Woods.
Laurentian is keeping its quarterly dividend unchanged, but Mike Rizvanovic predicts the dividend will be increased.
The fourth quarter results also included a restructuring charge and a strategic review charge totaling $15.9 million.