Laurentian Bank of Canada
Annual Report 2011
Learn to Grow
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2011
Annual Report
Learn to grow
Introduction
Laurentian Bank of Canada
Annual Report 2011
Learn to Grow
2
Introduction
Laurentian Bank of Canada
Annual Report 2011
Learn to Grow
Mission Statement
Index
The Values Fueling Our Actions
Mission Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 03
What does it mean to be a part of Laurentian Bank
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 04
With 157 branches, 413 automated banking machines, more than $23 billion in assets, and over 3,600 employees, Laurentian Bank is firmly rooted in Québec, where it operates the third largest branch network. Elsewhere in Canada, the Bank has secured a choice position in certain specific market segments. Moreover, with 37% of its loans originating from other provinces, the Bank enjoys the benefits of nationwide geographic diversification.
Corporate Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 05 Chairman’s report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 06 Director’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 07 Auditor’s Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 08 New Services Offered. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 09 Super Fast Service Current Accounts
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Established in 1846, Laurentian Bank is widely recognized today for its exceptional service, and simplicity and proximity. The Bank offers varied financial services to individuals and to Small and Medium-Sized Enterprises. It also provides products to an extensive external network of independent financial advisors through B2B Trust, as well as full-service brokerage services via Laurentian Bank Securities.
Adult Savings Accounts Junior Accounts Golden Age Savings Accounts Investment Accounts Fixed Deposit Accounts Loan Facilities Facts and Figures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Portfolio of Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Profit and Loss Account. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
In recognition of the challenges posed by its vocation as a financial institution serving the needs of individuals and businesses, Laurentian Bank has established a set of values that all its employees are expected to adhere to. These five principles serve as the engines that drive our collective motivation and bind us in the realization of our mission, and they are embodied in our commitments to our various stakeholders.
Passion for Client Interests
Integrity
In providing our clients with the services they need, we actively promote a quality approach with a human dimension that is fuelled by a dedication to excellence. These services are designed to satisfy and surpass the expectations of our clientele, and our passion for the interests of our clients is what maintains their loyalty and truly sets us apart.
We value honesty as an essential component of our relations with our clients, shareholder, employees and partners. Consequently, we are dedicated to acting with integrity and discipline at all times, and, in so doing, we succeed in earning and retaining the confidence of those we do business with.
Entrepreneurship Simplicity We are constantly striving for simplicity in the development of solutions tailored to specific situations. This simplicity makes us more accessible and open, and it serves as a key to enabling us to continuously optimize our services.
Teamwork Because our successes depends on our collective efforts, our employees are devoted to sharing their know-how, expertise and creativity with one another. Our ability to join forces and work hand-in-hand to accomplish common goals is the very foundation of our success and what makes us a winning team.
In order to foster the Bank’s ongoing development, our employees are encouraged to behave as if they were the owners of the organization, while, of course, respecting its policies and principles. Our business clients are entrepreneurs, as are many of our individual clients, and we are intimately familiar with the challenges they face and always prepared to provide them with the most accessible and highest quality financial solutions.
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Introduction
Laurentian Bank of Canada
Annual Report 2011
Learn to Grow
Board of Directors
Introduction
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Laurentian Bank of Canada
Annual Report 2011
Learn to Grow
Corporate Data
Putting a Face to the Name
Head Office Laurentian Bank of Canada 186 Nautilus Boulevard, Victoria, V8V 5E7, British Columbia, Canada
John Smith, Chairman
Marie Ruth, Resident
Marty Don, Finance Director
Laurentian Bank
Resource International
ACWO Group Limited
Telephone:
(250) 388-7000-5, 388-2011;
Fax:
(250) 388-7599
Trustee
Merchant Bank & Trust Limited
30 Non Street, Victoria BC V8V 1LO.
Registration
Canada Trust & Merchant Bank Limited
3920 Farrel Street, Victoria BC V8V 1LO.
Auditor(s)
Pryce Dryhouse
Scotty Centre, Tresher Road, Victoria BC V8V 1LO.
Secretary
Chief Corporation
1892 Kriptin Street, Victoria BC V8V 1LO.
Attorneys
Dillan Cow, Ferris and Oldenheim
1152 Alice Street, Victoria BC V8V 1LO
Bankers
Scottybank Canada Limited
Super Superior Bank Canada Limited
Companies Bank Limited
Real Estate Appraisers
James Doe, Vice President
Kathy Anil, Chairperson
Jeff James, Gen. Manager
Life Insurance Company
Holme Funds Limited
Ginnal Investments Limited
A.R. Alexis & Company Limited
Sea Street, Victoria BC V8V 1LO
C.D. Variance & Tinsel Company Limited
Ding Dong Road, Victoria BC V8V 1LO
Mickey, Masonary & Company Limited
43 Lord Mess Road, Victoria BC V8V 1LO
Bronco Investments Limited
30 Micro Close, Victoria BC V8V 1LO
Landmark Canada Stockbrokers Limited
50 Dice Drive, Dice Court, Victoria BC V8V 1LO
Maybe Investments Limited
123/4 Knotts Circle, Victoria BC V8V 1LO
DTR Stockbrokers Limited
20 Knotts Circle, Victoria BC V8V 1LO
Denture Stockbrokers Limited
67 Maddaxe Drive, Victoria BC V8V 1LO
Ritzy Stockbrokers Limited
2 Hobourne Road, Victoria BC V8V 1LO
Agents
Grinmost Advertising Limited
80 Hunting Road, Victoria BC V8V 1LO
Stockbrokers
BRT Investments Limited
14 St. Hilda’s Road, Victoria BC V8V 1LO
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Management Reports
Laurentian Bank of Canada
Annual Report 2011
Learn to Grow
Chairman’s Report Chairman of the Board
Moreover, its policies and corporate governance rules meet the highest standards of the Canadian banking and financial its industry. All of the members of the Board of Directors, apart from the President and Chief Executive Officer, are independent and unaffiliated with management. The Excellent results posted by Laurentian Bank in 2009 are attributable in large part to the loyalty of its clients, the confidence of its shareholders, and to the dedicated efforts of its employees. Via this publication, we are pleased to be providing all of these contributors to the Bank's success with a concise profile of the organization's activities and accomplishments outside of the strictly financial realm. Fiscal 2009 was certainly a year of recognition and distinction for our institution. For example, Commerce Magazine ranked Laurentian Bank as the second most admired financial institution by Québecers. The Bank also figured among the twenty most responsible corporate citizens in Québec according to responsible Investment Group, particularly because of its transparency. For its part, the Québec Federation of Chambers of Commerce selected Laurentian Bank to be among the 25 enterprises inducted into the Québec Business Hall of Fame in acknowledgement of our contributions to the development of the province. I firmly believe that these honours testify to our determination to remaining vigilant and to managing our activities with integrity, prudence and rigour. We are constantly striving to be more efficient, to bring our culture of service quality more to the fore, to
Management Reports
Laurentian Bank of Canada
Annual Report 2011
Learn to Grow
Director’s Report
John Smith The Laurentian Bank of Canada has always been recognized within the Canadian banking industry as a pioneer in a corporate governance. Notably, it was the first to separate the functions of chairman of the Board of Directors from those of President and the Chief Executive Officer.
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improve our approach and relations with our clientele, and to increase the value we offer to our investors. Moreover, we are committed to accentuating our community involvement and our contributions to the well-being of the population. In the year under review, Trust Funds that were invested in stocks and shares were affected by the continued fluctuations in the values of stocks at both home and abroad. On the 4th of November 2011 LB introduced daily pricing of Unit Trust Funds, a major change from the weekly pricing which had been in effect since 2008. During the past year, sales of new units amounted to $4,250 million, with encashments totalling $1,700 million. In the year under review, the economy continued through a period of change. Interest rates have continued to be high; deposit rates are in the 2% range and lending rates are at 6% and above. At the date of this Report, the Stock Exchange Index was at 14,500 points. At the end of February 2010 Dr. J. Nite and Mrs. V. Audit resigned from the Board of Directors. I must record our deep appreciation of their contributions over a period of many years. We look forward to a long and profitable relationship with our new Board, elected on March 1st, 2010. I wish to also thank our Unit holders, Directors, Management and Staff for their support , dedication and endless hard work.
The Directors of Laurentian Bank submit herewith their report for the year ended 30 April 2010 together with the Audited Accounts for the year ended on that date.
Accounts
Bonus Share Issue
New Gross Profit for the Year
59,000,167
Add. Balance Forwarded
203,666,234 262,666,401
Bonus Share Issue
(55,200,000) 212,466,401
On 28th March, 2010, the Authorized Share Capital of the Company was increased by 100,000,000 Shares of 50 cents each. Shares totalling 90,750,000 were issued to existing shareholders as Bonus Shares by capitalization of $51,750,000 from retained earnings. The Bonus issue was in the proportion of eighteen Ordinary Shares for every on Share held at 28th March, 2010.
Dividends The Directors do not recommend that a Dividend be declared for the year ended 30th April, 2010.
Directors In accordance with the Company’s Articles of Association, Dr. J. Nite, Mrs. V. Audit and Mr. M. Mighty resigned from the Board of Directors. The present Directors of the Company are Lady Katherine Anil, the Hon. Marie Ruth, Messrs. John Smith, James Doe, Martin Dons, and Sin Gin James.
Auditors Pryce Dryhouse, the retiring Auditors, have signified that they are willing to continue office in accordance with the provisions of Section 153 of the Companies Act. ON BEHALF OF THE BOARD OF DIRECTORS:
John Smith, Chairman Dated March 20th, 2011.
John Smith, Chairman Dated March 20th, 2011..
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Management Reports
Laurentian Bank of Canada
Annual Report 2011
Learn to Grow
Auditor’s Report
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Changes We've Made
Laurentian Bank of Canada
Annual Report 2011
Learn to Grow
New Services Offered Your Voice Fueling our Actions
Pryce Dryhouse
Super Fast Service
Golden Age Savings Accounts
18 March 1996
LB offers a numbered service system and plenty of comfortable seating while you wait. A Special Care Teller is available for Golden Agers, expectant Mums and the injured.
Golden Age Savings Accounts are available to our senior citizens over the age of 60. All Golden Age Savings Accounts will receive a minimum of 5.5% annual interest - and are automatically Tax Free!
Current Accounts
Investment Accounts
Free cheque books and 1.25% interest per annum come with accounts with balances over $2,000. Overdraft facilities are available on an individuallynegotiated basis. You receive monthly balance sheets, a complimentary cash withdrawal card, and a chance to win an all expenses paid trip for two to Martinique!
We can arrange individual investment accounts for amounts over $10,000.00. Our knowledge of local and Foreign stock markets a helps us to advise you on the most profitable investment decisions to be implemented in any one of international stock exchanges within minutes. We also offer mixed portfolio packages and a range of Blue Chip shares.
To the members of Laurentian Bank: We have examined the financial statements of Laurentian Bank and have obtained all the information and explanations which we required. Our examination was made in accordance with generally accepted auditing standards and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary. For bank management, the union constitutes a valuable partner in the development of human capital. Furthermore, it is quite clear to management that the interests of the bank and those of its employees are convergent. That is why we strongly advocate the development of an increasingly solid relationship with our union, promoting the harmonious management of labour relations at the same time. The union represents some 2,400 employees, or two thirds of our workforce. We are continuing to work in close collaboration with union representatives, as the mutual understanding we have developed over the years has proven to be highly beneficial to all parties concerned. In fact, our approach to labour relations is another aspect that clearly sets us apart from other institutions. Performance management is also a major area of focus at laurentian bank. That is why we have implemented the Performance Driven program, which is designed to ensure that each employee’s objectives are well aligned with the bank’s priorities and goals. As such, we help assure that every individual concentrates on what takes greatest precedence for the organization in carrying out their day-to-day activities. Finally, fiscal 2009 saw the bank expand its program aimed at facilitating the proper integration of new employees. In so doing, we assure that new recruits adhere to the bank’s culture and apply its stringent norms related to service quality upon their arrival.
To demonstrate the importance that we afford to their integration, a member of the Management committee participates in each Introducing LBS presentation made to new employees. Similarly, the past year was also marked by numerous initiatives within our workplace that demonstrate the active participation of the bank and its employees in meeting the collective challenge of sustainable development. This report outlines our actions over the course of an entire year and describes in detail how we operate with prudence and integrity while fulfilling our commitments. In that regard, hat mobilization and competence of our resources, our constant quest for quality, and excellence, and our long-term vision all play a vital role in our efforts to serve the needs of our clients, our employees, our shareholders and partners, as well as of the communities in which we pursue our development. In our opinion proper accounting records have been maintained and the financial statements, which are in agreement there with and have been prepared under the historical cost convention, comply with the provisions of the Companies Act and give a true and fair view of the state of the company’s affairs at 30 April 1999 and of the results of operations and cash flows for the year then ended.
Adult Savings Accounts We offer 6.5% interest per annum on accounts which maintain an annual balance of over $50,000.00, and 7% interest on accounts which maintain an annual average of over $100,000.00 per annum.
Fixed Deposit Accounts At present we offer Fixed Deposit Accounts for amounts over $1,000.00 with interest rates of 5%-6%.
Loan Facilities Junior Accounts We offer special Junior Accounts geared towards saving towards further education; young people with a consistent monthly savings record will be eligible for student loans at .25% below the average interest rate at the time of application.
We offer excellent rates of interest on a variety of loans, with special consideration and easy payback facilities to students and cases of emergency.
Laurentian Bank has established a Canadian presence from coast to coast, offering its clients a fully diversified range of financial products and services. Distinguished by its excellent service, its simplicity, and its proximity to its clientele, the bank serves the needs of both individuals and small and medium-sized enterprises.
Chartered Accountants
The bank operates more than 200 service points, including 156 retail bank branches in Québec and 32 commercial business centres across the country. It also offers a network of 408 automatic banking machines. The laurentian bank securities subsidiary conducts its activities through 15 brokerage offices in Québec and Ontario, while the b2b trust subsidiary has offices in four major Canadian centres.
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Financial Highlights
Laurentian Bank of Canada
Annual Report 2011
Learn to Grow
Financial Highlights
10
Facts and Figures
Laurentian Bank of Canada
Annual Report 2011
Learn to Grow
Portfolio of Investments
Our Clients are Our Obsession
Why should you invest in us
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We are committed: to satisfying our clients’ financial services needs, as well as improving the client experience. The bond of confidence we have established with our clients rests upon mutual sense of loyalty. In line with its business plan, the Bank has continued to maintain a prudent approach in its actions and decision during the past fiscal year. In fact, the economic turbulence that has marked the past few years has served to reinforce our determination to be constantly vigilant and to manage our activities with precaution and rigour. These exceptional circumstances also impelled us to be even more efficient and to bring our culture of service quality more to the fore.
April 30th 2010
Our numbers don’t lie.
Holdings Equities
If our long term records of successful growth are not convincing enough, have a look at the facts and figures over the past 5 years.
80,000
The bank recorded revenue of $15.8 million in the 1997-98 financial year, reflecting a growth of 18% over the previous year. Earnings from overseas investments continued to be the primary source of income, contributing 14% to total revenue; substantial contributions came from local investments, earnings from loans, and investment and service charges.
The third largest in Québec, our retail branch network is distinguished by its accessibility, innovative character, simplicity, and by its quality of service. Three branches underwent major renovations in 2010, and a new financial services boutique was opened in Laval.
13,600,400
Cappy Finance Group
1,400,000
Tropicana Cement Company Ltd.
12,600,000
3,800,002
Careers Group Ltd.
12,600,000
30,000
COTS Ltd. COTS Carib Ltd.
2,000,000
630,000
205,400
Peoples Bank Ltd.
1,250,500
900,000
Dail Group Ltd.
9,500,000
1,400,000
Cleaner Company Ltd.
6,420,000
3,500,000
Goody’s Canada Ltd.
3,200,500
500,800
Gracias Jose & Company Ltd.
250,000
Cay Life Insurance Ltd.
80
7,500,000 70
60
10,000,000
50
80
46.30 billion
70
We have a constantly Expanding Network.
.....Asking Price
1,000,002
500,400
STOCK AND SHARE TOTALS
Scotty Bank Canada Limited
$ Valuation at % of Fund
15.80 billion
60
12.20 billion 4.35 billion
Indy’s Developments Ltd.
6
50
3,080
Boilers Group Ltd.
21,600
40
612,700
Flower Power Ltd.
5,200,200
113,200
Mercury Ltd.
4,500,555
1,300,200
Jamhappy Ltd.
4,800,200
3,500,000
NSB Ltd.
2,500,200
30
20
13.45 billion
1
3,900,000
40
30
10
20
0
10,000 2,500 780,900
Laurentian Bank Income Categories 1993 -1998 Financial Year
Loans....
Investments
810,000
Local Stock & Shares
Foreign Stock & Shares
.....Total ......Income
99,000
Radio Uplift Canada Ltd. Prods Ltd.
47,000 24,500
Photocomms USA
5,700,000
Pymco Development Bank Ltd.
4,200,000
W’s Savings Bank Ltd.
3,750,200
10
0
11,056,183
10.058
7,755
11.50
50,400,000
39,000
12.00
11,056,183
Fixed Interest
2006
1.00 billion
1.50 billion
0.50 billion
1.20 billion
4.20 billion
2007
1.50 billion
1.80 billion
0.75 billion
1.15 billion
5.50 billion
2008
2.80 billion
2.20 billion
1.00 billion
2.70 billion
8.70 billion
2009
3.50 billion
3.20 billion
1.50 billion
4.00 billion
11.20 billion
Carried Forward
100,650,000
0.03
2010
7.00 billion
3.50 billion
1.10 billion
4.40 billion
16.00 billion
Brought Forward
110,700,003
100.55
15.80 billion
12.20 billion
4.85 billion
13.45 billion
46.30 billion
12,000 6,000
Government Stock 2011 Registered Stock 2010
EQUITY TIME GROWTH
46,800
28,300,060 110,700,003
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Financial Highlights
Laurentian Bank of Canada
Annual Report 2011
Learn to Grow
Portfolio of Investments 2
Share Type
Holding Equities
100,000 The Canada Sleeperstock Association 135,053 350
National Investments Company Limited Canada Light Limited
11,7500 National Trust 44,700 Vancouver Investments Limited 13,700 ING Savings 200
Creative Branch Limited
300
Canada Tel. Limited
Financial Highlights
$
$ Valuation at % of Fund 300,000
7.50
VARIABLE
137,000
11.75
130
5.00
Gross Income Expenses
“D”
5,000
5.00
“E”
17,900
6.00
Taxation
“B”
5,500
7.00
Net Profit
75
5.50
Retained Earnings
CUMULATIVE
115
6.00
63,500 People’s Bank of Canada
CUMULATIVE
63,500
25.00
27,000 Cranston Bank & Sons
CUMULATIVE
32,000
20.00
580,000
0.54
Profit Before Taxation
Total Value of Deposited Property
11,190,500
101.14
(1,296,058)
1.15
109,900,500
100.00
Deposits, receivables and other assets, less income available for distribution, payables and other liabilities.
2009
$
2010
116,000,200
45,870
50.281,500
30,670,050
607,500,600
15,000,600
900,500,400
4,600,800
45,000,200
9,600,400
102,800,500
98,000,900
150,600,234
107,800,000
Appropriations Bonus Issue
44,900,000 4,998,200
Dividend / Gross
Retained Earnings
Cash and Sundries
Learn to Grow
Income, Expenses, Earnings and Appropriations of Sales
CUMULATIVE
CUMULATIVE
Annual Report 2011
Year Ended April 30th 2010
....Asking Price
CUMULATIVE
Laurentian Bank of Canada
Profit and Loss Account
Corporate Debentures and Preference Shares April 30th 2011
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44,900,000
4,998,200
104,700,778
100,888,546
The B2B Trust subsidiary registered the best year in its history, generating remarkable growth of 45% in net earnings. Accounting for more than $5 billion in loans and deposits in the order of $9 billion, this business sector conducts its activities throughout Canada. In fact, B2B Trust is the country’s largest provider of financial products to independent financial advisors. Serving a network of more than 15,000 advisors, the subsidiary’s loan and deposit volume grew by 16% in 2010. Finally, thanks to the efforts of its team of 225 employees, Laurentian Bank Securities and Capital Markets also enjoyed a positive year in 2010. The Institutional Fixed Income Division retained its solid position and performance across the country, and Laurentian Bank Securities remains the only bank- owned brokerage house to specialize in the small-cap niche market.
Management Reviews net interest income included in total revenue and certain other financial measures.
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Finance Statements
Laurentian Bank of Canada
Annual Report 2011
Learn to Grow
Statement of Cash Flows
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Finance Statements
Laurentian Bank of Canada
Balance Sheet
Year Ended April 30th 2010 Financial Resources Were Provided by / (Used in):
$
1998
$
1997
Operating Activities Net Profit
47,700,150
9,500,600
Investment of Capital Investments
1,700,250
50,500,250
10,350,000
Capital Components
607,500,600
15,000,600
Taxation
900,500,400
4,600,800
45,000,200
9,600,400
102,800,500
98,000,900
15,300,200
30,400,500
Payables Investment Fund
104,200,100
6,300,100
6,600,150
Deposits
53,000,303
25,500,450
Cash
32,900,800
89,250
85,000,280
33,200,800
59,100,200
51,700,400
215,200
194,100
26,350,010
19,100,900
84,002,343
70,900,517
Receivables
Current Liabilities National Security Bank Investment Trust Services Limited Payables Dividend payable
Net Current Liabilities
Adjustment of Fixed Assets: Investment Activities (190,500)
Proceeds from Sale of Investments
(400,000)
(1,250,000)
(38,700,600)
110,920,580
65,200,900
Capital Account
75,300,600
59,450,000
Investment Evaluation Reserve
34,900,000
6,840,900
109,980,600
65,500,400
Capital Invested
Cost of Fixed Sales
2011
Current Assets
Changes in Non-Cash Working
Other Receivables
110,200,000
$
1997: -($97,200,000)
1,106,500 (380,800)
Gain on Sale of Fixed Investment
2009
Learn to Grow
1998: -($70.300,500)
Items Not Affecting Cash Resources Depreciation
$
Annual Report 2011
The number of units in issue at 30 April 2010 was:
490,000
(A)
Income
41,999,800
1997 -($20,470,900)
(B)
Accumulation
31,500,135
1997 -($29,700,000)
Purchasing
(3,200,900)
(200,000)
Cash Used
(3,500,700)
(3,800,250) ON BEHALF OF CANADA INVESTMENT TRUST SERVICES LIMITED
Average interest-earning assets were redefined and restated to include only interest-bearing deposits.
John Smith, Chairman Dated March 20th, 2011.
James Doe Dated March 20th, 2011.
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Laurentian Bank of Canada
laurentianbank.ca
Annual Report 2011
Learn to Grow
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