ATB reports strong revenues while higher loan provisions prompt decline in
profits

EDMONTON, Feb. 26 /CNW/ - Third-quarter profits at ATB Financial (ATB) declined, as growth in operating revenue was offset by an increase in provisions for credit losses.

Net income for the quarter ending December 31, 2009 (excluding provisions for asset-backed commercial paper and payment in lieu of tax) was $49.9 million, down 7.8 per cent from last year.

Net loans (including securitized mortgages) were up 8.8 per cent over December 31, 2008 to $24.0 billion, while an increasingly competitive deposit market led to a slight decrease in retail deposits, to $20.1 billion.

Operating revenue (excluding ABCP) jumped 7.9 per cent to $244.0 million, ATB's strongest-ever quarterly result.

ATB's drop in net income from last year's third quarter was prompted mainly by its increased provision for credit losses, up $6.3 million to $20.2 million.

Dave Mowat, ATB Financial's President and CEO, said this quarter's provision is necessarily cautious in an economy still emerging from the 2008-09 recession.

"While our loan portfolio and our customers have proven to be resilient through this recent cycle, we are setting aside additional provisions to be prudent as Alberta's economy rebuilds strength," he said.

Mowat said many of ATB's Canadian financial-industry peers have taken a similarly conservative approach to loan provisions.

ATB's loan growth shows the institution stood by Albertans through the lean months of 2008 and 2009, while the strength of its loan book and continuing solid returns during uncertain economic times are accomplishments its 5,000 associates should regard with pride, Mowat said.

    
    Operational Highlights
    ----------------------
    

Personal and Business Financial Services (PBFS) - ATB's largest line of business includes branches and agencies throughout Alberta. Assets, primarily consisting of loans, grew $1.8 billion, or 10.5 per cent, over the last year. Operating revenue increased slightly by $1.2 million. ATB continued construction on new branches in Sylvan Lake, Red Deer, Lethbridge and Medicine Hat.

Corporate Financial Services (CFS) - This line of business provides services to Alberta's mid- and senior-market companies in three sub-lines - Energy, Commercial, and Food & Forestry. CFS's assets grew by $85.3 million (1.6%) over the last year. Operating revenue increased over last year by $11.1 million, or 25.9 per cent.

ATB Investor Services (IS) - This line of business is responsible for growing and protecting wealth for more than 49,000 customers. At the end of the third quarter, client assets under IS's management and administration reached $4.8 billion, up $1.0 billion from last year's third quarter, or 27.1 per cent.

CORE Banking System - In May 2008, ATB launched a project to replace its outdated legacy banking technology with a new SAP(R) for Banking solution that will improve its ability to deliver leading-edge products and customer service. An internal review of the CORE project indicates the new system will launch in April 2011, or about one year behind schedule. The costs of the program are also expected to significantly increase from the initial budget of $160 million. Negotiations are underway with our key external vendors for this program and the expected costs are anticipated to be available by the release of our year-end financial results in May.

ATB in the Community - In October 2009, ATB organized Untapped Alberta, its successful concert series partnership with the Alberta Foundation for the Arts, Alberta Music and Big Rock Brewery. In November 2009, 4,600 readers of Alberta Venture magazine voted ATB Financial Alberta's Most Respected Corporation in the area of corporate social responsibility. Also in November, ATB delivered a 40-foot-high golf tee to Trochu, Alberta, the community winner of ATB's popular province-wide Teenormous Contest.

About ATB Financial - ATB Financial is the largest Alberta-based financial institution, with assets of $26.2 billion. It provides Personal and Business Financial Services, Investor Services, and Corporate Financial Services to more than 690,000 Albertans in 243 communities. It provides service through 165 branches and 131 agencies, telephone and Internet banking, a Customer Contact Centre, and Automated Banking Machines. ATB Financial was established in 1938 and has been a provincial Crown corporation since 1997. ATB has also been named one of Canada's 50 Best Employers by Report on Business Magazine, one of the 75 Best Workplaces in Canada by the Great Place to Work Institute, and one of Canada's Top 100 Employers and Alberta's Top 50 Employers by Mediacorp Canada Inc.

For complete third-quarter financial results, including Management's Discussion and Analysis, please visit www.atb.com.

SOURCE ATB Financial

For further information: For further information: Shawn Ohler, Director of External and Media Relations, ATB Financial, (780) 913-8905 (cell), (780) 408-6529 (office), e-mail: sohler@atb.com


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