EDMONTON 鈥� CWB Financial Group said Friday that earnings were hit in the last quarter as it set aside more funds for bad loans and saw its interest margin dip, but that it also saw loan growth as it continues its expansion into Ontario.聽
The Edmonton-based bank said it earned $80.8 million in common shareholders' net income or 88 cents per diluted share for the quarter ended July 31, down from $86.3 million or 98 cents per diluted share a year ago.
Profits were hit as the bank set aside $13.5 million for potential credit losses, up from $8.9 million a year ago, as it prepared for a potential downturn ahead.
"We're in a strong credit position should a mild recession in sa国际传媒 emerge over the next year," said chief executive Chris Fowler told a conference call with financial analysts Friday.聽
The bank also saw its net interest margin drop eight basis points this quarter compared with last year, while most Canadian banks reported gains as they have raised interest rates on their products.
Fast-rising central bank interest rates increased funding costs that have climbed faster than the bank has been able to reprice loans, Matt Rudd, chief financial officer, told analysts.
Higher rates on guaranteed investment certificates have also attracted more investors looking for yield, putting pressure on the bank's margins.
Scotiabank also reported a slight drop in its interest rate margin in the quarter compared with last year on the higher upfront costs of GICs that have become popular, while lending rates have yet to catch up.
CWB revenue totalled $271.7 million, up from $263.2 million in the same quarter last year, as the bank looks expand from its traditional market of Western sa国际传媒. The bank, which has a focus on small business clients, opened a banking centre in Mississauga in 2020 and plans for more.聽
"We delivered 13 per cent annual loan growth in Ontario. We expect even more momentum from the opening of our new Markham banking centre this quarter," said Fowler.聽
On an adjusted basis, CWB says it earned 90 cents per share in its most recent quarter compared with an adjusted profit of $1.01 per share a year earlier.
The adjusted profit per share for the quarter matched the average analyst estimate compiled by financial markets data firm Refinitiv.
This report by The Canadian Press was first published Aug. 26, 2022.
Companies in this story: (TSX:CWB)
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