Laurentian Bank reports net income of $21.2 million for the second quarter of 2009



    MONTREAL, May 27 /CNW Telbec/ -

    
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    Highlights of the second quarter 2009

    - Record loan and deposit growth during the quarter
    - Net income of $21.2 million
    - Return on common shareholders' equity of 8.5%
    - Net interest margin has bottomed-out during the quarter at 1.92%
    - Total revenue relatively unchanged at $154.8 million
    - Net impaired loans and loan losses unchanged compared to the last
      quarter
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    Laurentian Bank of Canada reported net income of $21.2 million, or $0.76
diluted per common share, for the second quarter ended April 30, 2009,
compared to net income of $25.1 million, or $0.93 diluted per common share,
for the second quarter of 2008. Return on common shareholders' equity was 8.5%
for the quarter, compared to 11.2% for the corresponding period in 2008.
    For the six months ended April 30, 2009, net income totalled $46.2
million or $1.68 diluted per common share, compared with net income of $44.3
million or $1.61 diluted per common share in 2008. Return on common
shareholders' equity was 9.3% for the six months ended April 30, 2009,
compared to 9.6% for the same period in 2008.
    Commenting on the Bank's operations, Réjean Robitaille, President and
Chief Executive Officer, mentioned: "We are extremely pleased with the record
core loan and deposit growth we were able to generate since the beginning of
the year. This is a fundamental indicator of our ability to pursue our long
term profitability strategy. We seized the opportunity provided by the latest
investment campaign to generate growth and significantly improve our liquidity
position. Combined with our strong financial condition, this liquidity level
should further enable us to capitalize on opportunities."
    Mr. Robitaille added, with regards to the financial results: "The
difficult economic conditions and unprecedented low interest rate environment
have hampered profitability during the last quarter. However, measures aimed
at restoring revenue growth have started to generate results. Also, even
though the current market environment has been challenging, credit quality,
while it deteriorated since last year-end, has held up nicely during the
quarter."

    Review of Business Development Initiatives

    The strong growth of loan portfolio and the outstanding increase in our
deposit volumes testify to the effectiveness of the Bank's distribution
networks and its strategies in the current environment.
    Loans and bankers' acceptances increased by more than $307 million during
the quarter while rigorous credit risk management was maintained. Close to 65%
of this growth came from residential mortgages. Various initiatives launched
by the Bank's business segments contributed to this growth and generated
significant interest from homebuyers.
    With respect to total deposits, volumes grew by a record $1.7 billion
during the quarter. The Tax-Free Savings Account and GIC products continued to
attract client attention, supported by an excellent 2009 RRSP campaign, while
it was B2B Trust's High Interest Investment Account (HIIA) that generated most
of the growth. This product's competitiveness and ease of access for financial
advisors are key contributors to its popularity and adds to B2B's leading
position in the financial intermediary market.
    The Bank experienced meaningful growth in its commercial loan portfolio,
by taking advantage of other interesting opportunities that exist in this
market. Furthermore, Laurentian Bank Securities' reputation and capabilities
in the institutional fixed income and retail markets contributed to its very
strong second quarter results.
    Prudently pursuing business development, the Bank continues to exert
tight expense control. Moreover, thanks to its strong capital base and high
level of liquidity, the Bank can proactively take advantage of opportunities
in the marketplace.

    Management's Discussion and Analysis

    This Management's Discussion and Analysis (MD&A) is a narrative
explanation, through the eyes of management, of the Bank's financial condition
as at April 30, 2009, and of how it performed during the three- and six-month
periods then ended. This MD&A, dated May 27, 2009, should be read in
conjunction with the unaudited interim consolidated financial statements for
the second quarter of 2009. Supplemental information on subjects such as risk
management, accounting policies and off-balance sheet arrangements is also
provided in the Bank's 2008 Annual Report.

    Performance and Financial Objectives

    The following presents management's financial objectives for 2009 and how
the Bank has performed to date.

    
    -------------------------------------------------------------------------
                                                          Six months ended
                                                            April, 30 2009
    Performance indicators               2009 objectives           (actual)
    ------------------------------ --------------------- --------------------
    Return on common shareholders'
     equity                                10.0% to 12.0%              9.3%
    Diluted net income per share          $3.70 to $4.40             $1.68
    Total revenue                              + 2% to 5%            + 1.5%
                                   ($645 to $665 million)    ($311 million)
    Efficiency ratio                           73% to 70%             72.2%
    Tier 1 capital ratio                  Minimum of 9.5%             10.0%
    -------------------------------------------------------------------------
    

    Results for the first six months of 2009, as presented above remain
acceptable considering financial market conditions and 2009 objectives
continue to be achievable, in view of the measures undertaken since the
beginning of the year to improve the Bank's performance.

    Analysis of Consolidated Results

    Three months ended April 30, 2009 compared to three months ended
    April 30, 2008

    Net income was $21.2 million, or $0.76 diluted per common share, for the
second quarter ended April 30, 2009, compared to net income of $25.1 million,
or $0.93 diluted per common share, for the second quarter of 2008.
    Total revenue was $154.8 million in the second quarter of 2009, compared
to $155.5 million in the second quarter of 2008, as a decline in net interest
income was mostly offset by other income growth.
    The Bank's net interest income decreased $4.9 million to $94.1 million
for the second quarter of 2009, from $99.0 million in the second quarter of
2008. Continued pressure on pricing over the last 18 months, as a result of
the strong demand for retail deposits and a lower interest rate environment
have affected margins and offset the effect of higher loan and deposit volumes
when compared to a year ago. However, loan repricing measures introduced
earlier this year and recent improvements in retail deposit pricing have
already contributed to improve margins. After reaching a low at the beginning
of the quarter, margins subsequently improved to more than 2.00% in April,
back to levels observed at the beginning of the year. For the second quarter
of 2009, the net interest margins stood at 1.92%, compared to 2.23% in the
second quarter of 2008.
    Other income totaled $60.7 million during the second quarter of 2009,
compared to $56.5 million in the second quarter of 2008. Income from brokerage
operations improved by $3.8 million during the second quarter of 2009,
compared to the second quarter of 2008, mainly as a result of a strong
performance from the Institutional Fixed Income division. Fees and commissions
on loans and deposits also improved, by $2.1 million, as a result of the
overall increase in business activity. Revenues from securitization activities
stood at $8.6 million for the second quarter of 2009, including a $9.2 million
gain on sale of residential mortgages, compared to securitization revenues of
$9.5 million for the second quarter of 2008. Note 3 to the interim financial
statements provides further details on securitization activities. Other
activities yielded generally unchanged results year-over-year.
    The provision for loan losses amounted to $12.0 million in the second
quarter of 2009, compared to $10.0 million in the second quarter of 2008 and
unchanged compared to the first quarter of 2009. The increase relates mainly
to commercial exposures and, to a lesser extent, to higher loan volumes and a
slight deterioration in consumer loan portfolios (particularly Visa and
unsecured lines of credit). Over the last three months, gross impaired loans
remained relatively unchanged, reflecting the overall good performance of the
loan portfolio. Net impaired loans stood at $12.5 million at April 30, 2009
(representing 0.08% of total loans, bankers' acceptances and assets purchased
under reverse repurchase agreements), compared to -$10.6 million (-0.07%) at
October 31, 2008. Gross impaired loans stood at $125.7 million at April 30,
2009, compared to $124.6 million at January 31, 2009 and $101.9 million at
October 31, 2008. The increase, essentially during the first quarter, mainly
resulted from the real estate and commercial loan portfolios. See Note 2 to
the interim consolidated financial statements for more details.
    Non-interest expenses totaled $114.0 million for the second quarter of
2009, compared to $110.9 million for the second quarter of 2008; a 2.9%
year-over-year increase. Salaries and employee benefits increased by $1.6
million, essentially as a result of higher salaries and targeted hiring,
partially offset by lower pension expenses. Premises and technology costs
remained relatively unchanged year-over-year. Other expenses increased by $0.9
million, mainly as a result of additional advertising expenses in the quarter.
The efficiency ratio (non-interest expenses divided by total revenue) was
73.7% in the second quarter of 2009, compared with 71.3% in the second quarter
of 2008.
    For the quarter ended April 30, 2009, the income tax expense was $7.6
million and the effective tax rate was 26.4%. For the quarter ended April 30,
2008, the income tax expense was $9.5 million and the effective tax rate was
27.4%.

    Six months ended April 30, 2009 compared to six months
    ended April 30, 2008

    For the six months ended April 30, 2009, net income totalled $46.2
million or $1.68 diluted per common share, compared with net income of $44.3
million or $1.61 diluted per common share in 2008. Results for the six-month
period ended April 30, 2008, included the effect of a $5.6 million
unfavourable tax adjustment ($0.23 diluted per common share) recorded during
the first quarter. Excluding the effect of this tax item, net income would
have stood at $49.9 million for the six months ended April 30, 2008.
    Total revenue improved to $311.3 million for the six months ended April
30, 2009, compared to $306.6 million for the six months ended April 30, 2008.
Overall business growth has led to higher fees and commissions, higher
brokerage revenues, as well as higher securitization income. These increases
were partly offset by lower net interest income, as discussed above.
    The provision for loan losses amounted to $24.0 million for the six
months ended April 30, 2009, compared to $19.5 million for the six months
ended April 30, 2008, as a result of a more challenging credit environment and
higher loan volumes.
    Non-interest expenses totaled $224.8 million for the six months ended
April 30, 2009, compared to $219.4 million for the six months ended April 30,
2008. The increase is principally attributable to higher salaries in retail
banking and technology, as well as to higher advertising expenses. These
increases reflect management's continued efforts to devote resources to
business lines' growth in order to drive additional revenues. For the six
months ended April 30, 2009, the efficiency ratio stood at 72.2%, compared to
71.6% for the six months ended April 30, 2008.
    For the six months ended April 30, 2009, the income tax expense was $16.3
million and the effective tax rate was 26.1%, compared to $23.4 million and
34.6% for the six months ended April 30, 2008. Results for the six months
ended April 30, 2008, included the effect of a $5.6 million unfavourable tax
adjustment resulting from federal income tax rate reductions.

    Three months ended April 30, 2009 compared to three months
    ended January 31, 2009

    Net income was $21.2 million, or $0.76 diluted per common share, for the
second quarter ended April 30, 2009, compared to net income of $25.0 million,
or $0.91 diluted per common share, for the first quarter of 2009. The decrease
in profitability mainly results from lower net interest income, as discussed
above, as well as from the effect of the shorter quarter. As measures taken
earlier in 2009 take hold, net interest margin should improve and net interest
income should recover over the next quarters, supported by loan and deposit
growth. Other expenses also increased slightly, mainly in technology and
advertising costs.

    Analysis of Financial Condition

    Balance sheet assets stood at $20.4 billion at April 30, 2009, compared
to $19.6 billion at October 31, 2008.
    Liquid assets, including cash, deposits with other banks, securities and
assets purchased under reverse repurchase agreements, increased by $338.6
million, mainly as a result of strong deposit growth, as detailed below. This
higher level of liquid assets preserves the Bank's ability to capitalize on
growth opportunities as they arise and provides flexibility in meeting funding
requirements associated with the ongoing mortgage renewal period.
    The portfolio of loans and bankers' acceptances stood at $14.7 billion at
April 30, 2009, up $369.6 million from October 31, 2008. The Bank had another
solid quarter, with significant new loan volumes. Residential mortgages,
including securitized loans, increased by $368 million, as detailed below.

    
    Residential Mortgage Portfolio

                                      April 30,   October 31,
    (in millions of dollars)              2009          2008    Net growth
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    Residential mortgage loans, as
     reported on the balance sheet      $6,335        $6,183          $152
    Securitized loans                    2,615         2,399           216
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    Total residential mortgage loans,
     including securitized loans        $8,950        $8,582          $368
    -------------------------------------------------------------------------
    

    Commercial mortgages and commercial loans increased by more than $120
million and $90 million, respectively, since the beginning of the year.
Personal loans remained relatively stable over the last six months.
    Total personal deposits increased by a record $1.3 billion during the
second quarter and $2.1 billion since the beginning of the year, to reach
$14.5 billion as at April 30, 2009. B2B Trust's new HIIA provided for $1.7
billion of this total growth since the beginning of the year. The new account,
only available through B2B Trust's financial advisor network, answers clients'
financial preference for a higher yielding low-risk investment. This product
also helps fund the Bank's consolidated variable rate loan portfolios and
facilitates overall asset-liability management. Personal deposits sourced
through the retail branch operations improved, as well, by $227.7 million
since the beginning of the year as a result of another strong RRSP campaign.
The level of business and other deposits decreased by $132.8 million since the
beginning of the year, as reductions in commercial and institutional term
deposits more than offset increases in demand and notice deposits. As at April
30, 2009, personal deposits accounted for 84% of total deposits of $17.3
billion.
    Shareholders' equity stood at $1,131.6 million as at April 30, 2009,
compared with $1,083.4 million as at October 31, 2008. The increase in
shareholders' equity results from net income accumulated since the beginning
of the year and from the increase in the value of derivatives designated as
cash flow hedges, recorded in other comprehensive income.
    The Bank's book value per common share, excluding accumulated other
comprehensive income, was $36.83 as at April 30, 2009, compared to $35.84 as
at October 31, 2008. There were 23,849,313 common shares and 125,725 share
purchase options outstanding as at May 20, 2009.
    The regulatory Tier I capital of the Bank reached $989.0 million as at
April 30, 2009, as compared to $965.4 million as at October 31, 2008. The BIS
Tier 1 and total capital ratios stood at 10.0% and 12.0%, respectively, as at
April 30, 2009, unchanged from comparative ratios as at October 31, 2008.
These ratios remain strong. The tangible common equity ratio, at 8.2%, also
testifies to the high quality of the Bank's capital.
    At its meeting held on May 27, 2009, the Board of Directors declared
regular dividends on the various series of preferred shares to shareholders of
record on June 8, 2009 and a dividend of $0.34 per common share, payable on
August 1, 2009, to shareholders of record on July 2, 2009.
    Assets under administration stood at $13.7 billion as at April 30, 2009,
compared to $14.4 billion at October 31, 2008, and $15.9 billion at April 30,
2008. Declines in market values over the last 18 months have affected assets
under administration. Mortgages under management increased as a result of
securitization activities since the beginning of the year.

    Segmented Information

    The table below presents the net income contribution of each business
segment of the Bank. Compared to the first quarter of 2009, results were
generally affected by the shorter quarter.

    
    Net income contribution
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                                                Lauren-
                              Real                tian
                  Retail    Estate                Bank
    (in millions   & SME  & Commer-      B2B    Securi-
     of $)        Quebec      cial     Trust      ties     Other     Total
    -------------------------------------------------------------------------
                                                                   (note 1)
    Q2-2009          9.8       7.5       7.8       1.9      (5.8)     21.2
                      36%       28%       29%        7%      n/a       100%

    Q1-2009         10.2       7.9       8.1       1.0      (2.2)     25.0
                      37%       29%       30%        4%      n/a       100%

    Q2-2008          8.6       7.4       9.2       0.4      (0.4)     25.1
                      34%       29%       36%        1%      n/a       100%
    -------------------------------------------------------------------------
    Note 1: Percentage of net income contribution from the four business
            segments, excluding the Other segment.
    

    Retail & SME Quebec

    The Retail & SME Quebec business segment's contribution to net income
improved 14%, totalling $9.8 million for the second quarter of 2009, compared
with $8.6 million for the second quarter of 2008.
    Total revenue increased by $2.8 million, from $101.0 million in the
second quarter of 2008 to $103.8 million in the second quarter of 2009, as a
result of continued growth in loan and deposit volumes. Loan losses were
slightly lower, at $8.1 million in the second quarter of 2009, compared to
$8.5 million in the second quarter of 2008, as credit quality remained
relatively steady in spite of economic conditions. Non-interest expenses
increased by 2.4% or $1.9 million, from $81.2 million in the second quarter of
2008 to $83.1 million in the second quarter of 2009, mainly as a result of
increases in advertising expenses.

    Real Estate & Commercial

    The Real Estate & Commercial business segment's contribution to net
income improved slightly to $7.5 million for the second quarter of 2009,
compared to $7.4 million for the second quarter of 2008.
    Total revenue increased by 16%, or $2.8 million, from $17.6 million in
the second quarter of 2008 to $20.4 million in the second quarter of 2009,
mainly as a result of higher net interest income due to growth in loan
volumes. Loan losses were higher at $3.2 million in the second quarter of
2009, compared to $1.0 million in the second quarter of 2008, as certain
commercial accounts were provisioned during the quarter. Non-interest expenses
also increased by $0.8 million to $6.3 million in the second quarter of 2009,
from $5.5 million in the second quarter of 2008.

    B2B Trust

    The B2B Trust business segment's contribution to net income declined by
$1.4 million, to $7.8 million in the second quarter of 2009, compared with
$9.2 million in the second quarter of 2008.
    Total revenue decreased by $1.1 million, from $25.0 million in the second
quarter of 2008 to $23.9 million in the second quarter of 2009. Net interest
income decreased by $0.8 million year-over-year. Over the last 18 months, B2B
Trust's margins were under pressure, as competition for retail deposits rose.
In addition, margins were affected during the second quarter of 2009 by the
premium introductory pricing on B2B Trust's HIIA. The recent easing of
institutional funding conditions, combined with adjustments to the HIIA
pricing back to normal market conditions, have helped improve margins and
should allow for renewed net interest revenue growth for the remainder of the
year.
    Since the beginning of the year, deposits grew by more than $2.1 billion,
essentially as a result of the B2B Trust's HIIA. Average loans also continued
their progression, increasing by $159.0 million over the last six months,
including $82.1 million in investment loans. For the quarter ended April 30,
2009, average loans were $4,194 million; while average deposits were $7,810
million. B2B Trust's indirect retail deposits continue to contribute to the
Bank's overall liquidity and balance sheet strength.
    Loan losses, including losses on investment lending activities, remained
low at $0.7 million in the second quarter of 2009, compared with $0.5 million
in the second quarter of 2008. Non-interest expenses increased slightly to
$11.7 million in the second quarter of 2009, compared with $10.7 million in
the second quarter of 2008.

    Laurentian Bank Securities

    The Laurentian Bank Securities (LBS) business segment's contribution to
net income reached $1.9 million in the second quarter of 2009, compared with
$0.4 million in the second quarter of 2008. The solid performance of the
Institutional Fixed Income division and a better performance of retail
brokerage activities helped improve profitability significantly. Non-interest
expenses increased to $8.7 million in the second quarter of 2009, from $7.3
million in the second quarter of 2008, primarily due to higher variable
compensation costs.

    Other Segment

    The Other segment posted a negative contribution to net income of $5.8
million in the second quarter of 2009, compared with a negative contribution
of $0.4 million in 2008. Higher funding costs and lower margins on liquid
assets, as well as the effect of securitization activities have led to
negative net interest income of $17.8 million for the second quarter of 2009,
compared to negative net interest income of $10.4 million for the second
quarter of 2008. Other income for the second quarter of 2009 was slightly
lower at $13.1 million, compared to $14.4 million for the second quarter of
2008, mainly as a result of lower securitization revenues. Non-interest
expenses improved to $4.1 million for the second quarter of 2009, compared to
$6.2 million for the second quarter of 2008.

    Additional Disclosures - Investment in Asset-Backed Securities

    As detailed below, the Bank holds investments in asset-backed securities
in its investment and trading portfolios.

    
    As at April 30, 2009                         Term Notes
                                            --------------------
    (at market value,                                     Other
    in millions of dollars)    ABCP         CMBS          ABS(1)     Total
    -------------------------------------------------------------------------
    Securities issued by
     conduits previously
     covered by the
     Montreal Accord(2)           -            -           13           13
    Other securities              -           15            7           22
    -------------------------------------------------------------------------
    Total - Asset-backed
     securities                   -           15           20           35
    -------------------------------------------------------------------------
    (1) Excluding mortgage-backed securities that are fully guaranteed by the
        Canada Mortgage and Housing Corporation under the National Housing
        Act (NHA).
    (2) During the first quarter of 2009, all ABCP issued by conduits covered
        by the Montreal Accord were converted into term notes. The new
        securities have not traded actively to date. As a result, valuation
        techniques were used to estimate fair values. Compared to previous
        carrying amounts, the cumulative reductions in the value of these
        securities amount to $6.4 million, or approximately 33%.

    ABCP - Asset-backed commercial paper
    CMBS - Commercial mortgage-backed securities
    ABS - Asset-backed securities


    Additional Financial Information - Quarterly Results

    (in millions of
     dollars, except
     per share amounts   2009              2008
     (unaudited))          Q2       Q1       Q4       Q3       Q2       Q1
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total revenue      $154.8   $156.5   $152.8   $171.1   $155.5   $151.1
    Income from
     continuing
     operations          21.2     25.0     22.9     30.9     25.1     19.1
    Net income           21.2     25.0     27.3     30.9     25.1     19.1
    Income per common
     share from
     continuing
     operations
      Basic              0.76     0.92     0.84     1.17     0.93     0.68
      Diluted            0.76     0.91     0.84     1.17     0.93     0.68
    Net income per
     common share
      Basic              0.76     0.92     1.02     1.17     0.93     0.68
      Diluted            0.76     0.91     1.02     1.17     0.93     0.68
    Return on common
     shareholders'
     equity               8.5%    10.0%    11.5%    13.4%    11.2%     8.1%
    Balance sheet
     assets           $20,382  $19,847  $19,508  $19,301  $18,383  $18,270
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (in millions of
     dollars, except
     per share amounts                                       2007
     (unaudited))                                              Q4       Q3
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total revenue                                          $145.6   $151.0
    Income from
     continuing
     operations                                              25.7     23.2
    Net income                                               30.2     23.2
    Income per common
     share from
     continuing
     operations
      Basic                                                  0.96     0.85
      Diluted                                                0.95     0.85
    Net income per
     common share
      Basic                                                  1.14     0.85
      Diluted                                                1.14     0.85
    Return on common
     shareholders'
     equity                                                  13.8%    10.5%
    Balance sheet
     assets                                               $17,787  $18,011
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Accounting Policies

    New accounting standards adopted during fiscal 2009

    Goodwill and other intangible assets

    In November 2007, the Canadian Accounting Standards Board (AcSB) approved
new Section 3064, Goodwill and Intangible Assets, which supersedes Section
3062, Goodwill and Other Intangible Assets, and Section 3450, Research and
Development Costs. New Section 3064 reinforces a principle-based approach to
the recognition of costs as assets in accordance with the definition of an
asset and the criteria for asset recognition in Section 1000, Financial
Statement Concepts. It also specifically addresses the recognition of
internally generated intangible assets. In addition, EIC-27, Revenues and
Expenditures during the Pre-operating Period, will no longer apply following
the adoption of Section 3064. These changes, effective for the Bank as of
November 1, 2008, had no significant effect on the interim consolidated
financial statements.

    Credit Risk and the Fair Value of Financial Assets and
    Financial Liabilities

    On January 20, 2009, the Emerging Issue Committee of the Canadian
Institute of Chartered Accountants issued Abstract EIC-173, Credit Risk and
the Fair Value of Financial Assets and Financial Liabilities, applicable for
the Bank retroactively as of November 1, 2008. The Abstract confirms that an
entity's own credit risk and the credit risk of the counterparty should be
taken into account in determining the fair value of financial assets and
liabilities, including derivative instruments. This abstract had no
significant effect on the interim consolidated financial statements.

    Future changes in accounting policy

    International financial reporting standards

    In January 2006, the AcSB released its new Strategic Plan, which includes
the decision to move financial reporting for Canadian public entities to a
single set of globally accepted standards, namely, the International Financial
Reporting Standards (IFRS). Under the AcSB's plan, this new framework will be
effective for fiscal years beginning on or after January 1, 2011, that is, for
the Bank's fiscal year ending October 31, 2012. An analysis of the accounting
consequences of the conversion to IFRS is underway, and a timetable has been
prepared to assess the impact on financial disclosures, information systems
and internal controls. The Bank is also closely monitoring potential
implications of changes on capital requirements. A detailed changeover plan
will be prepared by the end of 2009 to facilitate the transition in 2011.
    To date, the Bank has analyzed the new requirements, especially with
respect to the accounting for financial instruments, including securitization
activities, hedging transactions and loan losses. Other topics of noteworthy
interest include employee benefits, business combinations and share-based
payments.

    Corporate Governance and Changes in Internal Control over
    Financial Reporting

    The Board of Directors and the Audit Committee of the Bank reviewed this
press release prior to its release today. The disclosure controls and
procedures support the ability of the President and Chief Executive Officer
and the Executive Vice-President and Chief Financial Officer in assuring that
Laurentian Bank's interim consolidated financial statements are fairly
presented.
    During the last quarter ended April 30, 2009, there have been no changes
in the Bank's policies or procedures and other processes that comprise its
internal control over financial reporting which have materially affected, or
are reasonably likely to materially affect, the Bank's internal control over
financial reporting.

    About Laurentian Bank

    Laurentian Bank of Canada is a banking institution operating across
Canada and offering its clients diversified financial services.
Differentiating itself through excellence in service, as well as through its
simplicity and proximity, the Bank serves individual consumers and small and
medium-sized businesses. The Bank also offers its products to a wide network
of independent financial intermediaries through B2B Trust, as well as
full-service brokerage solutions through Laurentian Bank Securities.
    Laurentian Bank is well established in the Province of Quebec, operating
the third-largest retail branch network. Elsewhere throughout Canada, it
operates in specific market segments where it holds an enviable position.
Laurentian Bank of Canada has more than $20 billion in balance sheet assets
and more than $13 billion in assets under administration. Founded in 1846, the
Bank employs more than 3,400 people.

    Non-GAAP Financial Measures

    The Bank uses both generally accepted accounting principles ("GAAP") and
certain non-GAAP measures to assess performance, such as return on common
shareholders' equity, net interest margin, book value per common share and
efficiency ratios. In addition, net income excluding significant items has
been presented at certain points in this document. Non-GAAP measures do not
have any standardized meaning prescribed by GAAP and are unlikely to be
comparable to any similar measures presented by other companies. The Bank
believes that these non-GAAP financial measures provide investors and analysts
with useful information so that they can better understand financial results
and analyze the Bank's growth and profitability potential more effectively.

    Caution Regarding Forward-looking Statements

    In this document and in other documents filed with Canadian regulatory
authorities or in other communications, Laurentian Bank of Canada may from
time to time make written or oral forward-looking statements within the
meaning of applicable securities legislation, including statements regarding
the Bank's business plan and financial objectives. These statements typically
use the conditional, as well as words such as prospects, believe, estimate,
forecast, project, expect, anticipate, plan, may, should, could and would, or
the negative of these terms, variations thereof or similar terminology.
    By their very nature, forward-looking statements are based on assumptions
and involve inherent risks and uncertainties, both general and specific in
nature. It is therefore possible that the forecasts, projections and other
forward-looking statements will not be achieved or will prove inaccurate.
Although the Bank believes that the expectations reflected in these
forward-looking statements are reasonable, it provides no assurance that these
expectations will prove to have been correct.
    The Bank cautions readers against placing undue reliance on
forward-looking statements when making decisions, as the actual results could
differ considerably from the opinions, plans, objectives, expectations,
forecasts, estimates and intentions expressed in such forward-looking
statements due to various material factors. Among other things, these factors
include capital market activity, changes in government monetary, fiscal and
economic policies, changes in interest rates, inflation levels and general
economic conditions, legislative and regulatory developments, competition,
credit ratings, scarcity of human resources and technological environment. The
Bank further cautions that the foregoing list of factors is not exhaustive.
For more information on the risks, uncertainties and assumptions that would
cause the Bank's actual results to differ from current expectations, please
also refer to the Bank's public filings available at www.sedar.com.
    The Bank does not undertake to update any forward-looking statements,
whether oral or written, made by itself or on its behalf, except to the extent
required by securities regulations.

    Conference Call

    Laurentian Bank invites media representatives and the public to listen to
the conference call with financial analysts to be held at 2 p.m. Eastern Time
on Wednesday, May 27, 2009. The live, listen-only, toll-free, call-in number
is 1-866-223-7781.
    You can listen to the call on a delayed basis at any time from 6:00 p.m.
on Wednesday, May 27, until midnight on June 17, 2009, by dialing the
following playback number: 1-800-408-3053 Code 3450658 #. The conference call
can also be heard through the Investor Relations section of the Bank's Web
site at www.laurentianbank.ca. The Bank's Website also offers additional
financial information.

    
    FINANCIAL
    HIGHLIGHTS

                                  FOR THE THREE MONTHS ENDED
    IN MILLIONS OF DOLLARS,       --------------------------
    UNLESS OTHERWISE INDICATED        APRIL 30      APRIL 30
    (UNAUDITED)                           2009          2008     VARIATION
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Earnings
    Net income                    $       21.2  $       25.1           (16) %
    Net income available to
     common shareholders          $       18.2  $       22.2           (18) %
    Return on common
     shareholders' equity (1)              8.5 %        11.2 %
    Per common share
    Diluted net income            $       0.76  $       0.93           (18) %
    Dividends declared            $       0.34  $       0.32             6  %
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    FINANCIAL RATIOS
    Per common share
    Dividend yield                        4.72 %        3.03 %
    Dividend payout ratio                 44.7 %        34.4 %
    As a percentage of average
     assets
    Net interest income                   1.92 %        2.23 %
    Provision for credit
     losses                               0.24 %        0.22 %
    Profitability
    Efficiency ratio (non-
     interest expenses as a %
     of total revenue)                    73.7 %        71.3 %
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                    FOR THE SIX MONTHS ENDED
    IN MILLIONS OF DOLLARS,         ------------------------
    UNLESS OTHERWISE INDICATED        APRIL 30      APRIL 30
    (UNAUDITED)                           2009          2008     VARIATION
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Earnings
    Net income                    $       46.2  $       44.3             4 %
    Net income available to
     common shareholders          $       40.0  $       38.4             4 %
    Return on common
     shareholders' equity (1)              9.3 %         9.6 %
    Per common share
    Diluted net income            $       1.68  $       1.61             4 %
    Dividends declared            $       0.68  $       0.64             6 %
    Book value (1)                $      36.83  $      34.30             7 %
    Share price - close           $      28.80  $      42.21           (32)%
    Financial position
    Balance sheet assets          $     20,382  $     18,383            11 %
    Assets under
     administration               $     13,688  $     15,861           (14)%
    Loans, bankers'
     acceptances and assets
     purchased under reverse
     repurchase agreements,
     net                          $     15,172  $     14,005             8 %
    Personal deposits             $     14,490  $     12,267            18 %
    Shareholders' equity and
     debentures                   $      1,282  $      1,202             7 %
    Number of common shares -
     end of period (in
     thousands)                         23,849        23,840             - %
    Net impaired loans as a
     % of loans, bankers'
     acceptances and assets
     purchased under reverse
     repurchase agreements                0.08 %       (0.02)%
    Risk-weighted assets          $      9,870  $      9,167             8 %
    Capital ratios
    Tier I BIS capital ratio              10.0 %        10.2 %
    Total BIS capital ratio               12.0 %        12.3 %
    Assets to capital multiple            17.3 x        16.4 x
    Tangible common equity as
     a percentage of risk-
     weighted assets (2)                   8.2 %         8.2 %
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    FINANCIAL RATIOS
    Per common share
    Price / earnings ratio
     (trailing four quarters)              7.4 x        11.7 x
    Market to book value                    78 %         123 %
    Dividend yield                        4.72 %        3.03 %
    Dividend payout ratio                 40.6 %        39.8 %
    As a percentage of
     average assets
    Net interest income                   1.96 %        2.25 %
    Provision for credit losses           0.24 %        0.22 %
    Profitability
    Efficiency ratio (non-
     interest expenses as a
     % of total revenue)                  72.2 %        71.6 %
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    OTHER INFORMATION
    Number of full-time
     equivalent employees                3,453         3,385
    Number of branches                     156           156
    Number of automated
     banking machines                      351           337
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) With regards to the calculation of the Return on common
        shareholders' equity ratio, the Bank considers that net income is the
        best measure of profitability and that common shareholders' equity,
        excluding accumulated other comprehensive income, would be used as a
        capital measure. The calculation of the Bank's book value is also
        based on common shareholders' equity, excluding accumulated other
        comprehensive income.
    (2) Tangible common equity is defined as common shareholders' equity,
        excluding accumulated other comprehensive income, less goodwill and
        other intangible assets.


    CONSOLIDATED
    BALANCE SHEET
                                         AS AT         AS AT         AS AT
    IN THOUSANDS OF DOLLARS           APRIL 30    OCTOBER 31      APRIL 30
    (UNAUDITED)              NOTES        2009          2008          2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    ASSETS
    Cash and non-interest-
     bearing deposits with
     other banks                  $     60,383  $     54,410  $     65,298
    Interest-bearing              -------------------------------------------
     deposits with other
     banks                             241,564        94,291       306,652
                                  -------------------------------------------
    Securities accounts
      Available-for-sale             1,531,078     1,327,504     1,119,563
      Held-for-trading                 856,691     1,069,197     1,131,149
      Designated as held-
       for-trading                   1,434,664     1,118,838       967,755
                                  -------------------------------------------
                                     3,822,433     3,515,539     3,218,467
                                  -------------------------------------------
    Assets purchased under
     reverse repurchase
     agreements                        539,859       661,391       479,320
                                  -------------------------------------------
    Loans                  2 and 3
      Personal                       5,308,722     5,302,046     5,179,589
      Residential mortgage           6,334,599     6,182,871     5,853,891
      Commercial mortgage            1,053,537       932,688       812,499
      Commercial and other           1,915,326     1,847,327     1,693,475
                                  -------------------------------------------
                                    14,612,184    14,264,932    13,539,454
      Allowance for loan
       losses                         (113,129)     (112,434)     (109,798)
                                  -------------------------------------------
                                    14,499,055    14,152,498    13,429,656
                                  -------------------------------------------
    Other
      Customers'
       liabilities under
       acceptances                     132,670       110,342        95,838
      Tangible capital
       assets and software             141,152       143,489       136,540
      Derivative financial
       instruments                     283,590       237,704       125,357
      Goodwill                          53,790        53,790        53,790
      Other intangible
       assets                           12,287        12,896        13,505
      Other assets                     595,434       522,202       458,852
                                  -------------------------------------------
                                     1,218,923     1,080,423       883,882
                                  -------------------------------------------
                                  $ 20,382,217  $ 19,558,552  $ 18,383,275
                                  -------------------------------------------
                                  -------------------------------------------
    LIABILITIES AND SHAREHOLDERS'
     EQUITY
    Deposits
      Personal                    $ 14,489,829  $ 12,430,038  $ 12,267,498
      Business, banks and
       other                         2,770,934     2,903,774     2,174,424
                                  -------------------------------------------
                                    17,260,763    15,333,812    14,441,922
                                  -------------------------------------------
    Other
      Obligations related
       to assets sold short            571,182       819,236       945,755
      Obligations related to
       assets sold under
       repurchase agreements           183,424     1,136,096       887,723
      Acceptances                      132,670       110,342        95,838
      Derivative financial
       instruments                     147,930       147,469        81,867
      Other liabilities                804,670       778,162       728,361
                                  -------------------------------------------
                                     1,839,876     2,991,305     2,739,544
                                  -------------------------------------------
    Subordinated debentures            150,000       150,000       150,000
                                  -------------------------------------------
    Shareholders' equity
      Preferred shares           4     210,000       210,000       210,000
      Common shares              4     257,496       257,462       257,278
      Contributed surplus                  193           173           142
      Retained earnings                620,732       596,974       560,364
      Accumulated other
       comprehensive income      8      43,157        18,826        24,025
                                  -------------------------------------------
                                     1,131,578     1,083,435     1,051,809
                                  -------------------------------------------
                                  $ 20,382,217  $ 19,558,552  $ 18,383,275
                                  -------------------------------------------
                                  -------------------------------------------
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    The accompanying notes are an integral part of the interim consolidated
    financial statements.


    CONSOLIDATED STATEMENT
    OF INCOME
                                                FOR THE THREE MONTHS ENDED
    IN THOUSANDS OF DOLLARS,      -------------------------------------------
    EXCEPT PER SHARE AMOUNTS          APRIL 30    JANUARY 31      APRIL 30
    (UNAUDITED)               NOTES       2009          2009          2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Interest income
      Loans                       $    171,158  $    190,648  $    206,420
      Securities                        16,723        18,465        14,831
      Deposits with other
       banks                               509         3,014         6,952
      Other, including
       derivative financial
       instruments                      34,257        22,275         4,391
                                  -------------------------------------------
                                       222,647       234,402       232,594
                                  -------------------------------------------
    Interest expense
      Deposits                         125,571       129,074       125,249
      Other, including
       derivative financial
       instruments                       1,116         4,678         6,421
      Subordinated
       debentures                        1,887         1,947         1,903
                                  -------------------------------------------
                                       128,574       135,699       133,573
                                  -------------------------------------------
    Net interest income                 94,073        98,703        99,021
                                  -------------------------------------------
    Other income
      Fees and commissions
       on loans and
       deposits                         24,665        23,609        22,535
      Income from brokerage
       operations                       10,754         8,691         6,965
      Income from treasury
       and financial market
       operations                        5,979         4,575         6,289
      Income from sales of
       mutual funds                      2,985         2,836         3,456
      Credit insurance
       income                            3,768         4,060         3,217
      Income from
       registered self-
       directed plans                    2,038         1,979         2,368
      Securitization income      3       8,594        10,525         9,497
      Other                              1,912         1,559         2,157
                                  -------------------------------------------
                                        60,695        57,834        56,484
                                  -------------------------------------------
    Total revenue                      154,768       156,537       155,505
                                  -------------------------------------------
    Provision for loan
     losses                      2      12,000        12,000        10,000
                                  -------------------------------------------
    Non-interest expenses
      Salaries and
       employee benefits                60,414        60,389        58,798
      Premises and
       technology                       29,790        27,985        29,154
      Other                             23,830        22,358        22,898
                                  -------------------------------------------
                                       114,034       110,732       110,850
                                  -------------------------------------------
    Income before income
     taxes                              28,734        33,805        34,655
    Income taxes                         7,579         8,758         9,506
                                  -------------------------------------------
    Net income                    $     21,155  $     25,047  $     25,149
                                  -------------------------------------------
                                  -------------------------------------------
    Preferred share
     dividends, including
     applicable taxes                    3,004         3,222         2,967
                                  -------------------------------------------
    Net income available
     to common shareholders       $     18,151  $     21,825  $     22,182
                                  -------------------------------------------
                                  -------------------------------------------
    Average number of
     common shares
     outstanding (in
     thousands)
      Basic                             23,849        23,848        23,837
      Diluted                           23,855        23,872        23,882
                                  -------------------------------------------
    Net income per common
     share
      Basic                       $       0.76  $       0.92  $       0.93
      Diluted                     $       0.76  $       0.91  $       0.93
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    The accompanying notes are an integral part of the interim consolidated
    financial statements.

                                                  FOR THE SIX MONTHS ENDED
    IN THOUSANDS OF DOLLARS,                      ------------------------
    EXCEPT PER SHARE AMOUNTS                        APRIL 30      APRIL 30
    (UNAUDITED)                          NOTES          2009          2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Interest income
      Loans                                     $    361,806  $    427,138
      Securities                                      35,188        28,237
      Deposits with other
       banks                                           3,523        14,372
      Other, including
       derivative financial
       instruments                                    56,532         4,391
                                                -----------------------------
                                                     457,049       474,138
                                                -----------------------------
    Interest expense
      Deposits                                       254,645       251,969
      Other, including
       derivative financial
       instruments                                     5,794        19,761
      Subordinated
       debentures                                      3,834         3,851
                                                -----------------------------
                                                     264,273       275,581
                                                -----------------------------
    Net interest income                              192,776       198,557
                                                -----------------------------
    Other income
      Fees and commissions
       on loans and deposits                          48,274        44,115
      Income from brokerage
       operations                                     19,445        14,357
      Income from treasury
       and financial market
       operations                                     10,554        13,425
      Income from sales of
       mutual funds                                    5,821         6,898
      Credit insurance
       income                                          7,828         6,273
      Income from
       registered self-
       directed plans                                  4,017         4,548
      Securitization income                   3       19,119        14,855
      Other                                            3,471         3,547
                                                -----------------------------
                                                     118,529       108,018
                                                -----------------------------
    Total revenue                                    311,305       306,575
                                                -----------------------------
    Provision for loan
     losses                                   2       24,000        19,500
                                                -----------------------------
    Non-interest expenses
      Salaries and employee
       benefits                                      120,803       117,065
      Premises and
       technology                                     57,775        58,384
      Other                                           46,188        43,955
                                                -----------------------------
                                                     224,766       219,404
                                                -----------------------------
    Income before income
     taxes                                            62,539        67,671
    Income taxes                                      16,337        23,410
                                                -----------------------------
    Net income                                  $     46,202  $     44,261
                                                -----------------------------
                                                -----------------------------
    Preferred share
     dividends, including
     applicable taxes                                  6,226         5,897
                                                -----------------------------
    Net income available
     to common shareholders                     $     39,976  $     38,364
                                                -----------------------------
                                                -----------------------------
    Average number of
     common shares
     outstanding (in
     thousands)
      Basic                                           23,849        23,830
      Diluted                                         23,863        23,872
    Net income per common
     share
      Basic                                     $       1.68  $       1.61
      Diluted                                   $       1.68  $       1.61
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    The accompanying notes are an integral part of the interim consolidated
    financial statements.


    CONSOLIDATED STATEMENT
    OF COMPREHENSIVE INCOME

                                          FOR THE                  FOR THE
                               THREE MONTHS ENDED         SIX MONTHS ENDED
    IN THOUSANDS OF           ---------------------   -----------------------
     DOLLARS               APRIL 30      APRIL 30    APRIL 30     APRIL 30
     (UNAUDITED)     NOTES     2009          2008        2009         2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net income             $ 21,155     $ 25,149     $ 46,202     $ 44,261
                           --------------------------------------------------
    Other comprehensive
     income, net of
     income taxes        8
      Net change in
       unrealized
       gains (losses) on
       available-for-sale
       securities             8,369         (535)         855       (2,732)
      Reclassification of
       realized (gains)
       and losses on
       available-for-sale
       securities to
       net income               (45)        (396)         672       (2,130)
      Net gains on
       derivative
       instruments
       designated as
       cash flow hedges       7,763        5,278       22,804       28,010
                           --------------------------------------------------
                             16,087        4,347       24,331       23,148
                           --------------------------------------------------
    Comprehensive income   $ 37,242     $ 29,496     $ 70,533     $ 67,409
                           --------------------------------------------------
                           --------------------------------------------------
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    The accompanying notes are an integral part of the interim consolidated
    financial statements.


    CONSOLIDATED STATEMENT OF CHANGES
    IN SHAREHOLDERS' EQUITY
                                                  FOR THE SIX MONTHS ENDED
                                                 ----------------------------
                                                    APRIL 30      APRIL 30
    IN THOUSANDS OF DOLLARS (UNAUDITED)    NOTES        2009          2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Preferred shares
      Balance at beginning and end
       of period                                 $   210,000   $   210,000
                                                 ----------------------------
    Common shares                            4
      Balance at beginning of period                 257,462       256,445
      Issued during the period under
       the stock option purchase plan        5            34           833
                                                 ----------------------------
      Balance at end of period                       257,496       257,278
                                                 ----------------------------
    Contributed surplus
      Balance at beginning of period                     173           105
      Stock-based compensation               5            20            37
                                                 ----------------------------
      Balance at end of period                           193           142
                                                 ----------------------------
    Retained earnings
      Balance at beginning of period                 596,974       537,254
      Net income                                      46,202        44,261
      Dividends
        Preferred shares, including
         applicable taxes                             (6,226)       (5,897)
        Common shares                                (16,218)      (15,254)
                                                 ----------------------------
      Balance at end of period                       620,732       560,364
                                                 ----------------------------
    Accumulated other comprehensive income   8
      Balance at beginning of period                  18,826           877
      Other comprehensive income, net
        of income taxes                               24,331        23,148
                                                 ----------------------------
      Balance at end of period                        43,157        24,025
                                                 ----------------------------
    Shareholders' equity                         $ 1,131,578   $ 1,051,809
                                                 ----------------------------
                                                 ----------------------------
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    The accompanying notes are an integral part of the interim consolidated
    financial statements.


    CONSOLIDATED STATEMENT
    OF CASH FLOWS
                                                FOR THE THREE MONTHS ENDED
                                  -------------------------------------------
    IN THOUSANDS OF DOLLARS           APRIL 30    JANUARY 31      APRIL 30
     (UNAUDITED)              NOTES       2009          2009          2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Cash flows relating to
     operating activities
    Net income                    $     21,155  $     25,047  $     25,149
    Adjustments to determine
     net cash flows relating
     to operating activities:
      Provision for loan losses         12,000        12,000        10,000
      Gains on securitization
       operations                3      (9,229)      (16,672)       (9,163)
      Net loss (gain) on
       disposal of non-trading
       securities                          725         2,685        (1,016)
      Future income taxes                4,294         7,319         8,169
      Depreciation and
       amortization                      8,193         8,045         7,667
      Net change in held-for
       -trading securities             196,179        16,327       155,250
      Change in accrued
       interest receivable             (14,919)        9,376        (9,093)
      Change in assets relating
       to derivative financial
       instruments                      (5,299)      (40,587)      (28,916)
      Change in accrued
       interest payable                  4,480       (11,649)       (6,886)
      Change in liabilities
       relating to derivative
       financial
       instruments                      13,901       (13,440)       14,372
      Other, net                       (12,209)      (25,657)       35,415
                                  -------------------------------------------
                                       219,271       (27,206)      200,948
                                  -------------------------------------------
    Cash flows relating to
     financing activities
      Net change in deposits         1,687,893       239,058       236,682
      Change in obligations
       related to assets sold
       short                          (334,147)       86,093     (300,933)
      Change in obligations
       related to assets sold
       under repurchase
       agreements                     (968,424)       15,752       178,956
      Issuance of common shares              -            34           312
      Dividends, including
      applicable income taxes          (11,113)      (11,331)      (10,595)
                                  -------------------------------------------
                                       374,209       329,606       104,422
                                  -------------------------------------------
    Cash flows relating to
     investing activities
      Change in securities
       available-for-sale and
       designated as
       held-for-trading
        Acquisitions                (1,810,651)   (1,002,611)     (424,575)
        Proceeds on sale and at
        maturities                   1,497,435       835,849       173,038
      Change in loans                 (467,955)     (387,043)     (509,506)
      Change in assets purchased
       under reverse repurchase
       agreements                       35,480        86,052       (36,942)
      Proceeds from mortgage
       loan securitizations            171,816       312,116       405,200
      Additions to tangible
       capital assets and
       software                         (8,356)       (4,770)       (7,586)
      Proceeds from disposal of
       tangible capital assets
       and software                          -             4            19
      Net change in interest-
       bearing deposits with
       other banks                        (596)     (146,677)      100,919
      Net cash flows from the
       sale of asset                         -             -             -
                                  -------------------------------------------
                                      (582,827)     (307,080)     (299,433)
                                  -------------------------------------------
    Net change in cash and
     non-interest-bearing
     deposits with other banks
     during the period                  10,653        (4,680)        5,937
    Cash and non-interest-bearing
     deposits with other banks
     at beginning of period             49,730        54,410        59,361
                                  -------------------------------------------
    Cash and non-interest-bearing
     deposits with other banks
     at end of period             $     60,383  $     49,730  $     65,298
                                  -------------------------------------------
                                  -------------------------------------------
    Supplemental disclosure
     relating to cash flows:
      Interest paid during the
       period                     $    112,728  $    149,341  $    141,444
      Income taxes paid during
       the period                 $      1,709  $      8,289  $      5,089
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                                  FOR THE SIX MONTHS ENDED
                                                -----------------------------
    IN THOUSANDS OF DOLLARS                        APRIL 30      APRIL 30
    (UNAUDITED)               NOTES                    2009          2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Cash flows relating to
     operating activities
    Net income                                  $     46,202  $     44,261
    Adjustments to determine
     net cash flows relating
     to operating activities:
      Provision for loan losses                       24,000        19,500
      Gains on securitization
       operations                3                   (25,901)      (15,185)
      Net loss (gain) on
       disposal of non-trading
       securities                                      3,410        (3,703)
      Future income taxes                             11,613        20,150
      Depreciation and
       amortization                                   16,238        15,340
      Net change in held-for
       -trading securities                           212,506       (44,191)
      Change in accrued
       interest receivable                            (5,543)       (6,762)
      Change in assets relating
       to derivative financial
       instruments                                   (45,886)      (62,612)
      Change in accrued
       interest payable                               (7,169)       (5,506)
      Change in liabilities
       relating to derivative
       financial
       instruments                                       461        11,016
      Other, net                                     (37,866)       39,461
                                                -----------------------------
                                                     192,065        11,769
                                                -----------------------------
    Cash flows relating to
     financing activities
      Net change in deposits                       1,926,951       563,214
      Change in obligations
       related to assets sold
       short                                        (248,054)       77,080
      Change in obligations
       related to assets sold
       under repurchase
       agreements                                   (952,672)      (41,264)
      Issuance of common shares                           34           833
      Dividends, including
         applicable income taxes                     (22,444)      (21,151)
                                                -----------------------------
                                                     703,815       578,712
                                                -----------------------------
    Cash flows relating to
     investing activities
      Change in securities
       available-for-sale and
       designated as
       held-for-trading
        Acquisitions                              (2,813,262)   (1,213,395)
        Proceeds on sale and at
        maturities                                 2,333,284       730,860
      Change in loans                               (854,998)     (967,809)
      Change in assets purchased
       under reverse repurchase
       agreements                                    121,532        60,984
      Proceeds from mortgage
       loan securitizations                          483,932       806,249
      Additions to tangible
       capital assets and
       software                                      (13,126)      (13,655)
      Proceeds from disposal of
       tangible capital assets
       and software                                        4           103
      Net change in interest-
       bearing deposits with
       other banks                                  (147,273)      (23,397)
      Net cash flows from the
       sale of asset                                       -        29,632
                                                -----------------------------
                                                    (889,907)     (590,428)
                                                -----------------------------
    Net change in cash and
     non-interest-bearing
     deposits with other banks
     during the period                                 5,973            53
    Cash and non-interest-bearing
     deposits with other banks
     at beginning of period                           54,410        65,245
                                                -----------------------------
    Cash and non-interest-bearing
     deposits with other banks
     at end of period                           $     60,383  $     65,298
                                                -----------------------------
                                                -----------------------------
    Supplemental disclosure
     relating to cash flows:
      Interest paid during the
       period                                   $    262,069  $    287,653
      Income taxes paid during
       the period                               $      9,998  $      1,098
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    The accompanying notes are an integral part of the interim consolidated
    financial statements.


    NOTES TO CONSOLIDATED
    FINANCIAL STATEMENTS
    ALL TABULAR AMOUNTS ARE IN THOUSANDS OF DOLLARS, UNLESS OTHERWISE
    INDICATED (UNAUDITED)


    1. ACCOUNTING POLICIES

    The unaudited interim consolidated financial statements of Laurentian Bank
of Canada (the Bank) have been prepared by management who is responsible for
the integrity and fairness of the financial information presented. These
interim consolidated financial statements have been prepared in accordance
with Canadian generally accepted accounting principles "GAAP" for interim
financial statements. The significant accounting policies used in the
preparation of these interim consolidated financial statements, except for
changes to accounting policies stated below, are the same as those in the
Bank's annual consolidated audited financial statements as at October 31,
2008. These accounting policies conform to GAAP. However, these interim
consolidated financial statements do not reflect all of the information and
disclosures required by GAAP for complete financial statements. Accordingly,
these interim consolidated financial statements should be read in conjunction
with the annual consolidated audited financial statements as at October 31,
2008. These interim consolidated financial statements reflect amounts which
are based on the best estimates and judgment of management. Actual results may
differ from these estimates. Certain comparative figures have been
reclassified to conform to the current period presentation.

    Changes to accounting policies

    Goodwill and other intangible assets

    In November 2007, the Canadian Accounting Standards Board (AcSB) approved
new Section 3064, Goodwill and Intangible Assets, which supersedes Section
3062, Goodwill and Other Intangible Assets, and Section 3450, Research and
Development Costs. New Section 3064 reinforces a principle-based approach to
the recognition of costs as assets in accordance with the definition of an
asset and the criteria for asset recognition in Section 1000. It also
specifically addresses the recognition of internally developed intangible
assets. In addition, EIC-27, Revenues and Expenditures during the
Pre-operating Period, will no longer apply following the adoption of Section
3064. These changes, effective for the Bank as of November 1, 2008, had no
significant effect on the interim consolidated financial statements.

    Credit Risk and the Fair Value of Financial Assets and Financial
    Liabilities

    On January 20, 2009, the Emerging Issue Committee of the Canadian
Institute of Chartered Accountants issued Abstract EIC-173, Credit Risk and
the Fair Value of Financial Assets and Financial Liabilities, applicable for
the Bank retroactively as of November 1, 2008. The Abstract confirms that an
entity's own credit risk and the credit risk of the counterparty should be
taken into account in determining the fair value of financial assets and
liabilities, including derivative instruments. This abstract had no
significant effect on the interim consolidated financial statements.


    2. LOANS

    Loans and impaired loans

                                                      AS AT APRIL 30, 2009
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                GROSS AMOUNT
                                  GROSS AMOUNT   OF IMPAIRED      SPECIFIC
                                      OF LOANS         LOANS    ALLOWANCES
    -------------------------------------------------------------------------
    Personal loans                $  5,308,722  $     22,057  $      7,738
    Residential mortgages            6,334,599        24,025         1,986
    Commercial mortgages             1,053,537         6,057         1,908
    Commercial and other loans       1,915,326        73,538        28,247
                                  -------------------------------------------
                                  $ 14,612,184  $    125,677  $     39,879
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                                     GENERAL         TOTAL
                                                  ALLOWANCES    ALLOWANCES
    -------------------------------------------------------------------------
    Personal loans                              $     31,695  $     39,433
    Residential mortgages                              3,976         5,962
    Commercial mortgages                               5,660         7,568
    Commercial and other loans                        31,919        60,166
                                                -----------------------------
                                                $     73,250  $    113,129
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                    AS AT OCTOBER 31, 2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                GROSS AMOUNT
                                  GROSS AMOUNT   OF IMPAIRED      SPECIFIC
                                      OF LOANS         LOANS    ALLOWANCES
    -------------------------------------------------------------------------
    Personal loans                $  5,302,046  $     19,250  $      6,634
    Residential mortgages            6,182,871        16,579         1,405
    Commercial mortgages               932,688         6,275         1,883
    Commercial and other loans       1,847,327        59,769        29,262
                                  -------------------------------------------
                                  $ 14,264,932  $    101,873  $     39,184
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                     GENERAL         TOTAL
                                                  ALLOWANCES    ALLOWANCES
    -------------------------------------------------------------------------
    Personal loans                              $     33,052  $     39,686
    Residential mortgages                              4,211         5,616
    Commercial mortgages                               4,760         6,643
    Commercial and other loans                        31,227        60,489
                                                -----------------------------
                                                $     73,250  $    112,434
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                      AS AT APRIL 30, 2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                GROSS AMOUNT
                                  GROSS AMOUNT   OF IMPAIRED      SPECIFIC
                                      OF LOANS         LOANS    ALLOWANCES
    -------------------------------------------------------------------------
    Personal loans                $  5,179,589  $     17,780  $      6,240
    Residential mortgages            5,853,891        20,683         1,551
    Commercial mortgages               812,499         4,847         1,828
    Commercial and other loans       1,693,475        64,183        34,929
                                  -------------------------------------------
                                  $ 13,539,454  $    107,493  $     44,548
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                                     GENERAL         TOTAL
                                                  ALLOWANCES    ALLOWANCES
    -------------------------------------------------------------------------
    Personal loans                              $     29,161  $     35,401
    Residential mortgages                              2,517         4,068
    Commercial mortgages                               3,772         5,600
    Commercial and other loans                        29,800        64,729
                                                -----------------------------
                                                $     65,250  $    109,798
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Specific allowances for loan losses
                                                        FOR THE SIX MONTHS
                                                            ENDED APRIL 30
                                                                      2009
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                     RESI-           COMMERCIAL      TOTAL
                      PERSONAL    DENTIAL COMMERCIAL  AND OTHER   SPECIFIC
                         LOANS  MORTGAGES  MORTGAGES      LOANS  ALLOWANCE
    -------------------------------------------------------------------------
    Balance at
     beginning
     of period        $  6,634   $  1,405   $  1,883   $ 29,262   $ 39,184
    Provision for
     loan losses
     recorded in the
     consolidated
     statement of
     income             17,142        796         25      6,037     24,000
    Write-offs         (19,325)      (540)         -     (7,113)   (26,978)
    Recoveries           3,287        325          -         61      3,673
                      -------------------------------------------------------
    Balance at end
     of period        $  7,738   $  1,986   $  1,908   $ 28,247   $ 39,879
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                        FOR THE SIX MONTHS
                                                            ENDED APRIL 30
                                                                      2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                                     TOTAL
                                                                  SPECIFIC
                                                                ALLOWANCES
    -------------------------------------------------------------------------
    Balance at
     beginning
     of period                                                    $ 50,072
    Provision for
     loan losses
     recorded in the
     consolidated
     statement of
     income                                                         19,500
    Write-offs                                                     (27,705)
    Recoveries                                                       2,681
                                                                  -----------
    Balance at end
     of period                                                    $ 44,548
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Loans past due but not impaired

    Personal and residential mortgage loans shown in the table below are not
classified as impaired because either they are less than 90 days past due or
they are secured in order to reasonably expect full repayment. Commercial
loans past due but not impaired are not significant.

                                                      AS AT APRIL 30, 2009
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                               1 TO        32 TO         OVER
                            31 DAYS      90 DAYS      90 DAYS        TOTAL
    -------------------------------------------------------------------------
    Personal loans        $  83,358    $  28,192    $   5,883    $ 117,433
    Residential mortgages   164,538       49,662        8,919      223,119
                          ---------------------------------------------------
                          $ 247,896    $  77,854    $  14,802    $ 340,552
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                                                    AS AT OCTOBER 31, 2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                               1 TO        32 TO         OVER
                            31 DAYS      90 DAYS      90 DAYS        TOTAL
    -------------------------------------------------------------------------
    Personal loans        $  86,850    $  26,298    $   3,665    $ 116,813
    Residential mortgages   151,524       27,861       16,368      195,753
                          ---------------------------------------------------
                          $ 238,374    $  54,159    $  20,033    $ 312,566
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    3. LOAN SECURITIZATION

    The Bank securitizes residential mortgage loans insured by the Canadian
Mortgage and Housing Corporation, as well as conventional mortgages. The gains
before income taxes, net of transaction related costs, are recognized in
securitization income.
    The following table summarizes the residential mortgage loan
securitization transactions carried out by the Bank:

                                            FOR THE THREE MONTHS ENDED
                                  -------------------------------------------
                                      APRIL 30    JANUARY 31      APRIL 30
                                          2009          2009          2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Cash proceeds, net of
     transaction costs               $ 171,816     $ 312,116     $ 405,200
    Rights to future excess spreads     15,180        28,307        21,516
    Servicing liability                 (1,301)       (2,798)       (3,284)
    Other                               (2,735)       (5,058)       (6,161)
                                  -------------------------------------------
                                       182,960       332,567       417,271
    Residential mortgages
     securitized and sold             (172,039)     (312,402)     (406,246)
    Write-off of loan origination
     costs                              (1,692)       (3,493)       (1,862)
                                  -------------------------------------------
    Securitization gains             $   9,229     $  16,672     $   9,163
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                                  FOR THE SIX MONTHS ENDED
                                                -----------------------------
                                                    APRIL 30      APRIL 30
                                                        2009          2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Cash proceeds, net of
     transaction costs                             $ 483,932     $ 806,249
    Rights to future excess spreads                   43,487        34,625
    Servicing liability                               (4,099)       (6,650)
    Other                                             (7,793)       (8,248)
                                                -----------------------------
                                                     515,527       825,976
    Residential mortgages
     securitized and sold                           (484,441)     (805,683)
    Write-off of loan origination
     costs                                            (5,185)       (5,108)
                                                -----------------------------
    Securitization gains                           $  25,901     $  15,185
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    With regard to the transfer of residential mortgages, the key assumptions
used to determine the initial fair value of retained interests at the
securitization date for transactions carried out during the second quarter of
2009 are summarized as follows:

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Weighted average term (Months)                                      31
    Rate of prepayment                                                26.1 %
    Discount rate                                                      1.1 %
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    No loss is expected on insured residential mortgages.

    The following table details securitization income as reported in the
consolidated statement of income:

                                                FOR THE THREE MONTHS ENDED
                                  -------------------------------------------
                                      APRIL 30    JANUARY 31      APRIL 30
                                          2009          2009          2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Securitization gains               $ 9,229      $ 16,672       $ 9,163
    Changes in fair value of seller
     swaps and financial instruments
     held as economic hedges             4,245        (5,789)       (1,007)
    Servicing income                     1,820         1,835         1,568
    Revaluation of retained
     interests                          (6,287)       (1,520)          413
    Other                                 (413)         (673)         (640)
                                  -------------------------------------------
                                       $ 8,594      $ 10,525       $ 9,497
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                                  FOR THE SIX MONTHS ENDED
                                                -----------------------------
                                                    APRIL 30      APRIL 30
                                                        2009          2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Securitization gains                            $ 25,901      $ 15,185
    Changes in fair value of seller
     swaps and financial instruments
     held as economic hedges                          (1,544)       (1,490)
    Servicing income                                   3,655         2,981
    Revaluation of retained
     interests                                        (7,807)        1,096
    Other                                             (1,086)       (2,917)
                                                -----------------------------
                                                    $ 19,119      $ 14,855
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    As at April 30, 2009, the Bank held rights to future excess spreads of
$86,635,000 (of which $81,943,000 related to insured mortgages) and cash
reserve accounts of $15,063,000.
    The total principal amount of securitized residential mortgages
outstanding amounted to $2,614,559,000 as at April 30, 2009 ($2,398,564,000 as
at October 31, 2008).


    4. CAPITAL STOCK

    Issuance of common shares

    During the quarter, no common shares were issued to management under the
Bank's employee share purchase option plan (1,613 common shares for a cash
consideration of $34,000 during the six-month period ended April 30, 2009).

    ISSUED AND
     OUTSTANDING            AS AT APRIL 30, 2009    AS AT OCTOBER 31, 2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    IN THOUSANDS OF
     DOLLARS, EXCEPT         NUMBER                    NUMBER
     NUMBER OF SHARES     OF SHARES       AMOUNT    OF SHARES       AMOUNT
    -------------------------------------------------------------------------
    Class A Preferred
     Shares(1)
      Series 9            4,000,000  $   100,000    4,000,000  $   100,000
      Series 10           4,400,000      110,000    4,400,000      110,000
                         ----------------------------------------------------
    Total preferred
     shares               8,400,000  $   210,000    8,400,000  $   210,000
                         ----------------------------------------------------
    Common shares        23,849,313  $   257,496   23,847,700  $   257,462
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) The preferred shares are convertible into common shares at the Bank's
        option. However, the number of shares issuable on conversion is not
        determinable until the date of conversion.


    Capital management

    The Bank's objective is to maintain an optimal level of capital to support
activities while generating an acceptable return for its shareholders,
considering the Bank's specific risk profile. Capital must be sufficient to
demonstrate the Bank's solvency and its ability to deal with all of its
operating risks, as well as to offer depositors and creditors the requisite
safety. Capital must also meet minimum regulatory requirements, as defined by
the Office of the Superintendent of Financial Institutions Canada (OSFI),
internal capital adequacy objectives and be aligned with targeted credit
ratings.
    Regulatory guidelines issued by OSFI require banks to maintain a minimum
Tier 1 capital ratio of at least 7% and a total capital ratio of at least 10%.
The Bank is monitoring its regulatory capital based on the Standard Approach
for credit risk and on the Basic Indicator Approach for operational risk, as
proposed by the Bank for International Settlements regulatory risk-based
capital framework (Basel II). The Bank has complied with these requirements
throughout the six-month period ended April 30, 2009.

    Regulatory capital


                                         AS AT         AS AT         AS AT
                                      APRIL 30    OCTOBER 31      APRIL 30
                                          2009          2008          2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Tier 1 capital
      Common shares               $    257,496  $    257,462  $    257,278
      Contributed surplus                  193           173           142
      Retained earnings                620,732       596,974       560,364
      Non-cumulative preferred
       shares                          210,000       210,000       210,000
      Less: goodwill,
       securitization and other        (99,373)      (99,239)      (91,973)
                                  -------------------------------------------
    Total - Tier 1 capital             989,048       965,370       935,811
                                  -------------------------------------------
    Tier 2 capital
      Subordinated debentures          150,000       150,000       150,000
      General allowances                73,250        73,250        65,250
      Less : securitization
       and other                       (30,788)      (31,738)      (27,319)
                                  -------------------------------------------
    Total - Tier 2 capital             192,462       191,512       187,931
                                  -------------------------------------------
    Total - capital               $  1,181,510  $  1,156,882  $  1,123,742
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    5. STOCK-BASED COMPENSATION

    Share Purchase Option Plan

    There were no new grants during the first six months of 2009. Information
on outstanding number of options is as follows:

                                                       AS AT         AS AT
                                                    APRIL 30,   OCTOBER 31,
                                                        2009          2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                      NUMBER        NUMBER
    -------------------------------------------------------------------------
    Share purchase options
      Outstanding at end of period                   125,725       127,338
      Exercisable at end of period                   100,725        89,838
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Restricted share unit plan

    During the first quarter of 2009, under the restricted share unit plan,
annual bonuses for certain employees amounting to $1,528,000 were converted
into 42,537 entirely vested restricted share units. The Bank also granted
25,522 additional restricted share units that will vest in December 2011.

    Performance-based share unit plan

    During the first quarter of 2009, under the performance-based share unit
plan, the Bank granted 42,724 performance-based share units valued at $35.93
each. Rights to 37.5% of these units will vest after 3 years. The rights to
the remaining units will vest after 3 years, upon meeting certain financial
objectives.

    Stock appreciation rights plan

    During the second quarter of 2009, the Bank granted 2,000 stock
appreciation rights (SARs) (27,000 SARs during the six-month period ended
April 30, 2009).

    Stock-based compensation plan expense

    The following table presents the expense related to all stock-based
compensation plans, net of the effect of related hedging transactions.


                                           FOR THE                 FOR THE
                                THREE MONTHS ENDED        SIX MONTHS ENDED
                  ---------------------------------   -----------------------
                  APRIL 30  JANUARY 31    APRIL 30    APRIL 30    APRIL 30
                      2009        2009        2008        2009        2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Stock-based
     compensation
     plan expense  $   238     $(5,915)    $ 4,319     $(5,677)    $   206
    Effect of
     hedges            (16)      8,029      (4,386)      8,013       1,253
                  -----------------------------------------------------------
    Total          $   222     $ 2,114     $   (67)    $ 2,336     $ 1,459
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    6. EMPLOYEE FUTURE BENEFITS

                                           FOR THE                 FOR THE
                                THREE MONTHS ENDED        SIX MONTHS ENDED
                  ---------------------------------   -----------------------
                  APRIL 30  JANUARY 31    APRIL 30    APRIL 30    APRIL 30
                      2009        2009        2008        2009        2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Defined benefit
     pension plan
     expense       $ 1,140     $ 1,471     $ 2,583     $ 2,611     $ 5,223
    Defined
     contribution
     pension plan
     expense         1,031         993         929       2,024       1,745
    Other plan
     expense           804         832         812       1,636       1,642
                   ----------------------------------------------------------
    Total          $ 2,975     $ 3,296     $ 4,324     $ 6,271     $ 8,610
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    7. WEIGHTED AVERAGE NUMBER OF OUTSTANDING COMMON SHARES

                                                FOR THE THREE MONTHS ENDED
                                  -------------------------------------------
                                      APRIL 30    JANUARY 31      APRIL 30
                                          2009          2009          2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Average number of outstanding
     common shares                  23,849,313    23,848,489    23,836,734
    Dilutive share purchase
     options                             5,289        23,426        45,108
                                  -------------------------------------------
    Weighted average number of
     outstanding common shares      23,854,602    23,871,915    23,881,842
                                  -------------------------------------------
                                  -------------------------------------------
    Average number of share
     purchase options not taken
     into account in the
     calculation of diluted net
     income per common share(1)        105,400             -             -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) The average number of share purchase options was not taken into
        account in the calculation of diluted net income per common share
        since the average exercise price of these options exceeded the
        average market price of the Bank's shares during theses periods.


                                                  FOR THE SIX MONTHS ENDED
                                                -----------------------------
                                                    APRIL 30      APRIL 30
                                                        2009          2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Average number of outstanding
     common shares                                23,848,894    23,830,300
    Dilutive share purchase
     options                                          14,508        41,511
                                                -----------------------------
    Weighted average number of
     outstanding common shares                    23,863,402    23,871,811
                                                -----------------------------
                                                -----------------------------
    Average number of share
     purchase options not taken
     into account in the
     calculation of diluted net
     income per common share(1)                      51,827             -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) The average number of share purchase options was not taken into
        account in the calculation of diluted net income per common share
        since the average exercise price of these options exceeded the
        average market price of the Bank's shares during theses periods.

    8. SUPPLEMENTAL INFORMATION ON OTHER COMPREHENSIVE INCOME

    Other comprehensive income

                                                FOR THE THREE MONTHS ENDED
                                                                  APRIL 30
                                                                      2009
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                        BEFORE                      NET OF
                                        INCOME        INCOME        INCOME
                                         TAXES         TAXES         TAXES
    -------------------------------------------------------------------------
    Unrealized gains and (losses)
     on available-for-sale
     securities
      Net unrealized gains and
       (losses) during the
       period                     $     12,054  $     (3,685) $      8,369
      Less : reclassification
       of realized (gains) and
       losses to net income
       during the period                   (64)           19           (45)
                                  -------------------------------------------
                                        11,990        (3,666)        8,324
    Net gains on derivatives
     designated as cash flow
     hedges                             11,777        (4,014)        7,763
                                  -------------------------------------------
    Other comprehensive income    $     23,767  $     (7,680) $     16,087
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                FOR THE THREE MONTHS ENDED
                                                                  APRIL 30
                                                                      2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                        BEFORE                      NET OF
                                        INCOME        INCOME        INCOME
                                         TAXES         TAXES         TAXES
    -------------------------------------------------------------------------
    Unrealized gains and (losses)
     on available-for-sale
     securities
      Net unrealized gains and
       (losses) during the
       period                     $       (710) $        175  $       (535)
      Less : reclassification
       of realized (gains) and
       losses to net income
       during the period                  (512)          116          (396)
                                  -------------------------------------------
                                        (1,222)          291          (931)
    Net gains on derivatives
     designated as cash flow
     hedges                              7,822        (2,544)        5,278
                                  -------------------------------------------
    Other comprehensive income    $      6,600  $     (2,253) $      4,347
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                  FOR THE SIX MONTHS ENDED
                                                                  APRIL 30
                                                                      2009
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                        BEFORE                      NET OF
                                        INCOME        INCOME        INCOME
                                         TAXES         TAXES         TAXES
    -------------------------------------------------------------------------
    Unrealized gains and (losses)
     on available-for-sale
     securities
      Net unrealized gains and
       (losses) during the
       period                     $      1,136  $       (281) $        855
      Less : reclassification
       of realized (gains) and
       losses to net income
       during the period                   977          (305)          672
                                  -------------------------------------------
                                         2,113          (586)        1,527
    Net gains on derivatives
     designated as cash flow
     hedges                             34,163       (11,359)       22,804
                                  -------------------------------------------
    Other comprehensive income    $     36,276  $    (11,945) $     24,331
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                  FOR THE SIX MONTHS ENDED
                                                                  APRIL 30
                                                                      2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                        BEFORE                      NET OF
                                        INCOME        INCOME        INCOME
                                         TAXES         TAXES         TAXES
    -------------------------------------------------------------------------
    Unrealized gains and (losses)
     on available-for-sale
     securities
      Net unrealized gains and
       (losses) during the
       period                     $     (3,915) $      1,183  $     (2,732)
      Less : reclassification
       of realized (gains) and
       losses to net income
       during the period                (2,525)          395        (2,130)
                                  -------------------------------------------
                                        (6,440)        1,578        (4,862)
    Net gains on derivatives
     designated as cash flow
     hedges                              41,412      (13,402)       28,010
                                  -------------------------------------------
    Other comprehensive income     $     34,972  $   (11,824) $     23,148
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Accumulated other comprehensive income (net of income taxes)



    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                               ACCUMULATED
                                          CASH    AVAILABLE-         OTHER
                                          FLOW      FOR-SALE COMPREHENSIVE
                                       HEDGING    SECURITIES        INCOME
    -------------------------------------------------------------------------
    Balance at October 31, 2008    $    35,417   $   (16,591) $     18,826
      Change during the three months
       ended January 31, 2009           15,041        (6,797)        8,244
      Change during the three months
       ended April 30, 2009              7,763         8,324        16,087
                                  -------------------------------------------
    Balance at April 30, 2009      $    58,221   $   (15,064) $     43,157
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------




    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                               ACCUMULATED
                                          CASH    AVAILABLE-         OTHER
                                          FLOW      FOR-SALE COMPREHENSIVE
                                       HEDGING    SECURITIES        INCOME
    -------------------------------------------------------------------------
    Balance at October 31, 2007    $   (10,255)  $    11,132  $        877
     Change during the three months
      ended January 31, 2008            22,732        (3,931)       18,801
     Change during the three months
      ended April 30, 2008               5,278          (931)        4,347
                                  -------------------------------------------
    Balance at April 30, 2008           17,755         6,270        24,025
    Change during the three months
     ended July 31, 2008                  (641)      (10,789)      (11,430)
    Change during the three months
     ended October 31, 2008             18,303       (12,072)        6,231
                                  -------------------------------------------
    Balance at October 31, 2008    $    35,417   $   (16,591)  $    18,826
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    9. RISK MANAGEMENT

    The Bank is exposed to various types of risks owing to the nature of the
business activities it carries on, including those related to the use of
financial instruments. In order to manage the risks associated with using
financial instruments, including loan and deposit, security and derivative
financial instrument portfolios, controls such as risk management policies and
various risk limits have been implemented. These measures aim to optimize the
return/risk ratio in all operating segments. A corporate governance structure
was also designed to ensure global risk tolerance is consistent with the
Bank's strategies and objectives. The main risks to which the Bank is exposed
are set out below.

    Market risk

    Market risk corresponds to the financial losses that the Bank could incur
because of unfavorable fluctuations in the value of financial instruments
following variations in the parameters underlying their valuation, such as
interest rates, exchange rates or quoted stock market prices.
    As at April 30, 2009 the effect on the economic value of common
shareholders' equity and on its net interest income before taxes of a sudden
and sustained 1% increase in interest rates is as follows:


                                                       AS AT         AS AT
                                                    APRIL 30,   OCTOBER 31,
                                                        2009          2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Increase (decrease) in net interest income
     before taxes over the next 12 months        $     4,202   $     8,901
    Increase (decrease) in the economic
     value of common shareholders' equity        $   (36,037)  $   (27,060)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Credit risk

    The use of financial instruments, including derivatives, can result in
credit risk exposure representing the risk of financial loss arising from a
counterparty's inability or refusal to fully honour its contractual
obligations.
    Note 2 to these interim consolidated financial statements, provides
detailed information on the Bank's loan portfolios.
    With respect to derivative financial instruments, the majority of the
Bank's credit concentration is with financial institutions, primarily Canadian
banks.
    The amount that best represents the maximum exposure to credit risk of the
Bank as at April 30, 2009, without taking account of any collateral held or
other credit enhancements, essentially corresponds to the sum of financial
assets on the consolidated financial statement to which are added
credit-related commitments as set-out below.


                                                       AS AT         AS AT
                                                    APRIL 30,   OCTOBER 31,
    IN MILLIONS OF DOLLARS                              2009          2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Financial assets, as reported on
     balance sheet                               $    20,049   $    19,255
    Credit commitments and other off-balance
     sheet items (1)                                   4,605         4,153
                                                -----------------------------
    Total                                        $    24,654   $    23,408
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Including $2,175,000,000 as at April 30, 2009 ($2,083,000,000 as at
        October 31, 2008) related to personal credit facilities and credit
        card lines.


    Liquidity risk

    Liquidity risk represents the possibility that the Bank may not be able to
gather sufficient cash resources, when required and under reasonable
conditions, to meet its financial obligations. Liquidity management pays
particular attention to deposit and loan maturities, as well as to funding
availability and demand when planning financing.

    Contractual maturities of financial liabilities

    The following table presents the principal obligations related to
financial liabilities by contractual maturity.


                                                       AS AT APRIL 30, 2009
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                        TERM
                                     ----------------------------------------
                             DEMAND       WITHIN       1 TO 5          OVER
                         AND NOTICE       1 YEAR        YEARS       5 YEARS
    -------------------------------------------------------------------------
    Deposits            $ 5,326,824  $ 5,206,480  $ 6,717,550       $ 9,909
    Obligations related
     to assets sold
     short                        -      571,182            -             -
    Obligations related
     to assets sold
     under repurchase
     agreements                   -      183,424            -             -
    Subordinated
     debentures                   -            -      150,000             -
                       ------------------------------------------------------
                        $ 5,326,824  $ 5,961,086  $ 6,867,550       $ 9,909
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                                       AS AT APRIL 30, 2009
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                                      TOTAL
    -------------------------------------------------------------------------
    Deposits                                                   $ 17,260,763
    Obligations related
     to assets sold
     short                                                          571,182
    Obligations related
     to assets sold
     under repurchase
     agreements                                                     183,424
    Subordinated
     debentures                                                     150,000
                       ------------------------------------------------------
                                                               $ 18,165,369
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    10. SUPPLEMENTAL INFORMATION ON FINANCIAL INSTRUMENTS

    Fair value of financial instruments

    The fair value of a financial instrument is defined as the amount of
consideration for a financial instrument that would be agreed upon in an arm's
length transaction between knowledgeable, willing parties who are under no
compulsion to act. Quoted market prices are not available for a significant
portion of the Bank's financial instruments. As a result, for these
instruments, the fair values presented are estimates derived using present
value or other valuation techniques and may not be indicative of the net
realizable value.
    When fair value is determined using valuation models, it may be necessary
to use assumptions as to the amount and timing of estimated future cash flows
and discount rates. These assumptions reflect the risks inherent in financial
instruments.
    As at April 30, 2009, the fair value of financial assets and liabilities
approximate their carrying amount, except for the assets and liabilities
presented below.


                                                        AS AT APRIL 30, 2009
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                                                 FAVORABLE
                                      CARRYING          FAIR  (UNFAVORABLE)
    IN MILLIONS OF DOLLARS              AMOUNT         VALUE      VARIANCE
    -------------------------------------------------------------------------
    Assets
     Loans                           $  14,499     $  14,803      $    304

    Liabilities
      Deposits                          17,261        17,519          (258
      Subordinated debentures        $     150     $     157      $     (7)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                                      AS AT OCTOBER 31, 2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                                                 FAVORABLE
                                      CARRYING          FAIR  (UNFAVORABLE)
    IN MILLIONS OF DOLLARS              AMOUNT         VALUE      VARIANCE
    -------------------------------------------------------------------------
    Assets
     Loans                           $  14,153     $  14,272      $    119

    Liabilities
      Deposits                          15,334        15,418           (84)
      Subordinated debentures        $     150     $     155      $     (5)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Methods and assumptions used in estimating the fair value of financial
    instruments

    Loans
    The fair value of loans is estimated by discounting cash flows adjusted to
reflect prepayments, if any, at the prevailing interest rates in the
marketplace for new loans with substantially similar terms. For certain
variable rate loans subject to frequent rate resets and loans with
indeterminate maturities, the fair value is deemed to represent the carrying
amount.

    Deposits
    The fair value of fixed rate deposits is estimated using discounted cash
flows based on current market interest rates for deposits with substantially
similar terms. The fair value of deposits without stated maturities or
variable rate deposits is deemed to represent their carrying amount.

    Subordinated debentures
    The fair value of subordinated debentures is estimated using discounted
cash flows based on current market interest rates for similar issues or rates
currently offered for debt securities with the same term to maturity.

    Unrealized gains and losses on the portfolio of available-for-sale
    securities

    The following table presents the gross unrealized gains and unrealized
losses on available-for-sale securities, recognized in other comprehensive
income.

                                                        AS AT APRIL 30, 2009
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                          AMORTIZED   UNREALIZED   UNREALIZED         FAIR
                               COST        GAINS       LOSSES        VALUE
    -------------------------------------------------------------------------
    Securities issued
     or guaranteed
      by Canada         $   727,882  $       372  $         -  $   728,254
      by provinces          544,084        5,855            -      549,939
    Other debt
     securities             134,182        4,623        2,016      136,789
    Asset-backed
     securities              20,225            -        2,466       17,759
    Preferred shares         72,959           54        6,115       66,898
    Common shares and
     other securities        43,962            -       12,523       31,439
                       ------------------------------------------------------
                        $ 1,543,294  $    10,904  $    23,120  $ 1,531,078
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                      AS AT OCTOBER 31, 2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                          AMORTIZED   UNREALIZED   UNREALIZED         FAIR
                               COST        GAINS       LOSSES        VALUE
    -------------------------------------------------------------------------
    Securities issued
     or guaranteed
      by Canada         $   977,724  $       575  $        31  $   978,268
      by provinces           26,604            -          303       26,301
    Other debt
     securities             200,342          287        3,650      196,979
    Asset-backed
     securities              20,323            1        1,036       19,288
    Preferred shares         75,329            6        6,263       69,072
    Common shares and
     other securities        46,966           29        9,399       37,596
                       ------------------------------------------------------
                        $ 1,347,288  $       898  $    20,682  $ 1,327,504
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    As at April 30, 2009, unrealized losses mainly related to publicly traded
equity and preferred shares of Canadian financial institutions, and to a
lesser extent, to investments in other public companies. The share prices of
these companies have generally declined over the last 6 to 9 months due to
current market conditions. However, these companies have maintained good
financial conditions and their business plans remain sound. As a result,
Management has determined that these declines in fair value were temporary in
nature and that it had the ability and the intent to hold these securities
until their fair value recovers. These declines in value were included in
accumulated other comprehensive income.

    Financial instruments designated as held-for-trading

    Management can elect to designate financial instruments as
held-for-trading instruments, with changes in fair value recorded in income,
provided that such designations meet specific criteria. Certain securities,
retained interests related to securitization activities and retail deposits
were designated as held-for-trading in order to significantly reduce a
recognition inconsistency that would otherwise have arisen from recognizing
gains and losses on different bases. These financial instruments are used as
part of the Bank's overall asset-liability management and provide an economic
hedge for other financial instruments that are measured at fair value. Gains
and losses on these instruments are therefore generally offset by changes in
value of other financial instruments. The following table presents the effect
on net income of fair valuing these instruments:


                                           FOR THE THREE MONTHS ENDED
                                     ----------------------------------------
                                      APRIL 30    JANUARY 31      APRIL 30
                                          2009          2009          2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Included in securitization
     income                            $ 3,455      $ 21,246       $ 9,504
    Included in income from treasury
     and financial market operations       139           (45)       (1,083)
                                     ----------------------------------------
    Total                              $ 3,594      $ 21,201       $ 8,421
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                                   FOR THE SIX MONTHS ENDED
                                                 ----------------------------
                                                    APRIL 30      APRIL 30
                                                        2009          2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Included in securitization
     income                                         $ 24,701      $ 23,858
    Included in income from treasury
     and financial market operations                      94          (426)
                                                 ----------------------------
    Total                                           $ 24,795      $ 23,432
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    The nominal amount of deposits designated as held for trading was
$20,000,000 as at April 30, 2009 ($71,315,000 as at April 30, 2008). The
difference between the amount the Bank would be contractually required to pay
at maturity to the holders of these deposits and their carrying amount of
$20,160,000 as at April 30, 2009 ($71,652,000, as at April 30, 2008), is
$160,000 ($337,000, as at April 30, 2008).

    Derivative financial instruments

    Ineffectiveness related to hedging relationships

    The following table presents the ineffective portion of accumulated
changes in the fair value of hedging instruments recognized in the
consolidated statement of income.

                                           FOR THE THREE MONTHS ENDED
                                     ----------------------------------------
                                      APRIL 30    JANUARY 31      APRIL 30
                                          2009          2009          2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Favorable (unfavorable)
     ineffectiveness
      on cash flow hedging           $      89    $       35    $        7
      on fair value hedging               (227)         (770)         (352)
                                     ----------------------------------------
                                     $    (138)   $     (735)   $     (345)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                                   FOR THE SIX MONTHS ENDED
                                                 ----------------------------
                                                    APRIL 30      APRIL 30
                                                        2009          2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Favorable (unfavorable)
     ineffectiveness
      on cash flow hedging                        $      124    $      263
      on fair value hedging                             (997)         (252)
                                                 ----------------------------
                                                  $     (873)   $       11
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Breakdown of swap contracts designated as hedging instruments, by
    category

    The following table presents the Bank's swap contracts between those
designated as cash flow hedging instruments and those designated as fair value
hedging instruments.
    The swap contracts designated as hedging instruments are used by the Bank
primarily for balance sheet matching purposes and to mitigate net interest
revenue volatility. The fair value of such swap contracts may vary
considerably. Accordingly, changes in the fair value of the swap contracts
designated as cash flow hedging instruments could result in significant
changes in accumulated other comprehensive income and in shareholders' equity.


                            AS AT APRIL 30, 2009    AS AT OCTOBER 31, 2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                            NOMINAL   FAIR VALUE      NOMINAL   FAIR VALUE
                             AMOUNT   NET AMOUNT       AMOUNT   NET AMOUNT
    -------------------------------------------------------------------------
    Interest rate swap
     contracts
     designated as
     hedging instruments
      Swaps used for
       cash flow
       hedging          $ 3,841,000  $    70,781  $ 2,557,000  $    46,118
      Swaps used for
       fair value
       hedging            2,947,250      109,713    3,021,750       68,148
                        -----------------------------------------------------
                        $ 6,788,250  $   180,494  $ 5,578,750  $   114,266
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Other information on hedging relationships

    Net deferred gains of $30,916,000, included in accumulated other
comprehensive income as at April 30, 2009, are expected to be transferred into
net income over the next twelve months.
    The maximum term of cash flow hedging relationships was 5 years as at
April 30, 2009.

    11. SEGMENTED INFORMATION

                                                  FOR THE THREE MONTHS ENDED
                                                              APRIL 30, 2009
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                R & SME QUEBEC          RE&C           B2B
    -------------------------------------------------------------------------
    Net interest income           $     74,489   $    15,342   $    21,496
    Other income                        29,281         5,033         2,417
                               ----------------------------------------------
    Total revenue                      103,770        20,375        23,913
    Provision for loan losses            8,129         3,161           710
    Non-interest expenses               83,105         6,346        11,740
                               ----------------------------------------------
    Income (loss) before
     income taxes                       12,536        10,868        11,463
    Income taxes (recovered)             2,780         3,401         3,630
                               ----------------------------------------------
    Net income                    $      9,756   $     7,467   $     7,833
                               ----------------------------------------------
                               ----------------------------------------------
    Average assets (1)            $ 10,849,661   $ 2,274,033   $ 4,231,056
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                                  FOR THE THREE MONTHS ENDED
                                                              APRIL 30, 2009
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                           LBS         OTHER         TOTAL
    -------------------------------------------------------------------------
    Net interest income           $        526   $   (17,780) $     94,073
    Other income                        10,833        13,131        60,695
                               ----------------------------------------------
    Total revenue                       11,359        (4,649)      154,768
    Provision for loan losses                -             -        12,000
    Non-interest expenses                8,721         4,122       114,034
                               ----------------------------------------------
    Income (loss) before
     income taxes                        2,638        (8,771)       28,734
    Income taxes (recovered)               772        (3,004)        7,579
                               ----------------------------------------------
    Net income                    $      1,866   $    (5,767) $     21,155
                               ----------------------------------------------
                               ----------------------------------------------
    Average assets (1)            $  1,315,395   $ 1,440,895  $ 20,111,040
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                                  FOR THE THREE MONTHS ENDED
                                                            JANUARY 31, 2009
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                R & SME QUEBEC          RE&C           B2B
    -------------------------------------------------------------------------

    Net interest income           $     76,254   $    14,279  $     21,115
    Other income                        28,545         4,865         2,386
                               ----------------------------------------------
    Total revenue                      104,799        19,144        23,501
    Provision for loan losses            9,535         1,654           811
    Non-interest expenses               82,233         5,932        10,776
                               ----------------------------------------------
    Income (loss) before
     income taxes                       13,031        11,558        11,914
    Income taxes (recovered)             2,851         3,617         3,788
                               ----------------------------------------------
    Net income                    $     10,180   $     7,941  $      8,126
                               ----------------------------------------------
                               ----------------------------------------------
    Average assets (1)            $ 10,740,803   $ 2,205,826  $  4,164,755
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                                  FOR THE THREE MONTHS ENDED
                                                            JANUARY 31, 2009
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                           LBS         OTHER         TOTAL
    -------------------------------------------------------------------------
    Net interest income           $        750   $   (13,695) $     98,703
    Other income                         8,823        13,215        57,834
                               ----------------------------------------------
    Total revenue                        9,573          (480)      156,537
    Provision for loan losses                -             -        12,000
    Non-interest expenses                8,191         3,600       110,732
                               ----------------------------------------------
    Income (loss) before
     income taxes                        1,382        (4,080)       33,805
    Income taxes (recovered)               391        (1,889)        8,758
                               ----------------------------------------------
    Net income                    $        991   $    (2,191) $     25,047
                               ----------------------------------------------
                               ----------------------------------------------
    Average assets (1)            $  1,279,855   $ 1,218,262  $ 19,609,501
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                                  FOR THE THREE MONTHS ENDED
                                                              APRIL 30, 2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                R & SME QUEBEC          RE&C           B2B
    -------------------------------------------------------------------------
    Net interest income           $     72,690   $    13,692  $     22,297
    Other income                        28,331         3,890         2,737
                               ----------------------------------------------
    Total revenue                      101,021        17,582        25,034
    Provision for loan losses            8,545           997           458
    Non-interest expenses               81,182         5,526        10,651
                               ----------------------------------------------
    Income (loss) before
     income taxes                       11,294        11,059        13,925
    Income taxes (recovered)             2,728         3,672         4,700
                               ----------------------------------------------
    Net income                    $      8,566   $     7,387  $      9,225
                               ----------------------------------------------
                               ----------------------------------------------
    Average assets (1)            $  9,917,143   $ 2,110,641  $  3,806,798
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                                  FOR THE THREE MONTHS ENDED
                                                              APRIL 30, 2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                           LBS         OTHER         TOTAL
    -------------------------------------------------------------------------
    Net interest income           $        703   $   (10,361) $     99,021
    Other income                         7,141        14,385        56,484
                               ----------------------------------------------
    Total revenue                        7,844         4,024       155,505
    Provision for loan losses                -             -        10,000
    Non-interest expenses                7,322         6,169       110,850
                               ----------------------------------------------
    Income (loss) before
     income taxes                          522        (2,145)       34,655
    Income taxes (recovered)               141        (1,735)        9,506
                               ----------------------------------------------
    Net income                    $        381   $      (410) $     25,149
                               ----------------------------------------------
                               ----------------------------------------------
    Average assets (1)            $  1,431,709   $   809,073  $ 18,075,364
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                                    FOR THE SIX MONTHS ENDED
                                                              APRIL 30, 2009
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                R & SME QUEBEC          RE&C           B2B
    -------------------------------------------------------------------------
    Net interest income           $    150,743   $    29,621  $     42,611
    Other income                        57,826         9,898         4,803
                               ----------------------------------------------
    Total revenue                      208,569        39,519        47,414
    Provision for loan losses           17,664         4,815         1,521
    Non-interest expenses              165,338        12,278        22,516
                               ----------------------------------------------
    Income (loss) before
     income taxes                       25,567        22,426        23,377
    Income taxes (recovered)             5,631         7,018         7,418
                               ----------------------------------------------
    Net income                    $     19,936   $    15,408  $     15,959
                               ----------------------------------------------
                               ----------------------------------------------
    Average assets (1)            $ 10,794,330   $ 2,239,364  $  4,197,356
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                                    FOR THE SIX MONTHS ENDED
                                                              APRIL 30, 2009
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                           LBS         OTHER         TOTAL
    -------------------------------------------------------------------------
    Net interest income           $      1,276   $   (31,475) $    192,776
    Other income                        19,656        26,346       118,529
                               ----------------------------------------------
    Total revenue                       20,932        (5,129)      311,305
    Provision for loan losses                -             -        24,000
    Non-interest expenses               16,912         7,722       224,766
                               ----------------------------------------------
    Income (loss) before
     income taxes                        4,020       (12,851)       62,539
    Income taxes (recovered)             1,163        (4,893)       16,337
                               ----------------------------------------------
    Net income                    $      2,857   $    (7,958) $     46,202
                               ----------------------------------------------
                               ----------------------------------------------
    Average assets (1)            $  1,297,330   $ 1,327,734  $ 19,856,114
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                                    FOR THE SIX MONTHS ENDED
                                                              APRIL 30, 2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                R & SME QUEBEC          RE&C           B2B
    -------------------------------------------------------------------------
    Net interest income           $    145,674   $    27,325  $     44,301
    Other income (2)                    55,710         7,403         5,398
                               ----------------------------------------------
    Total revenue                      201,384        34,728        49,699
    Provision for loan losses           16,383         2,494           623
    Non-interest expenses              161,573        11,064        20,995
                               ----------------------------------------------
    Income (loss) before
     income taxes                       23,428        21,170        28,081
    Income taxes (3)                     5,784         7,007         9,472
                               ----------------------------------------------
    Net income                    $     17,644   $    14,163  $     18,609
                               ----------------------------------------------
                               ----------------------------------------------
    Average assets (1)            $  9,850,937   $ 2,102,509  $  3,742,640
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                                    FOR THE SIX MONTHS ENDED
                                                              APRIL 30, 2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                           LBS         OTHER         TOTAL
    -------------------------------------------------------------------------
    Net interest income            $     1,437   $   (20,180) $    198,557
    Other income (2)                    14,691        24,816       108,018
                               ----------------------------------------------
    Total revenue                       16,128         4,636       306,575
    Provision for loan losses                -             -        19,500
    Non-interest expenses               14,940        10,832       219,404
                               ----------------------------------------------
    Income (loss) before
     income taxes                        1,188        (6,196)       67,671
    Income taxes (3)                       339           808        23,410
                               ----------------------------------------------
    Net income                     $       849   $    (7,004) $     44,261
                               ----------------------------------------------
                               ----------------------------------------------
    Average assets (1)             $ 1,427,512   $   651,623  $  17,775,221
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    R & SME Quebec - The Retail & SME Quebec segment covers the full range of
                     savings, investment, financing and transactional
                     products and services offered through its direct
                     distribution network, which includes branches, the
                     electronic network and the call centre, as well as
                     Point-of-Sale financing across Canada. This business
                     segment also offers Visa credit card services, insurance
                     products and trust services. As well, it offers all
                     commercial financial services to the small and medium
                     enterprises in Quebec.
    RE&C -           The Real Estate & Commercial segment handles real estate
                     financing throughout Canada, commercial financing in
                     Ontario and National accounts.
    B2B -            The B2B Trust business segment supplies generic and
                     complementary banking and financial products to
                     financial advisors and non-bank financial institutions
                     across Canada. This business segment also encompasses
                     deposit brokerage operations.
    LBS -            LBS segment consists of the activities of the Laurentian
                     Bank Securities Inc. subsidiary.
    Other -          The Other segment includes treasury and securitization
                     activities and other activities of the Bank, including
                     revenues and expenses that are not attributable to the
                     above-mentioned segments.
    (1)              Assets are disclosed on an average basis as this measure
                     is most relevant to a financial institution.
    (2)              Other income in the Other segment includes a
                     $0.4 million ($0.3 million net of income taxes) loss on
                     the sale of a $30.1 million personal line of credit
                     portfolio. The Bank has not retained any rights or
                     obligations in respect of these loans.
    (3)              The Other segment's income taxes include a $5.6 million
                     tax adjustment reflecting the decrease in the Bank's
                     future income tax assets as a result of reductions in
                     federal income tax rates.
    




For further information:

For further information: Chief Financial Officer: Michel C. Lauzon,
(514) 284-4500, #7997; Media and Investor Relations contact: Gladys Caron,
(514) 284-4500, #7511; cell (514) 893-3963

Organization Profile

Laurentian Bank of Canada

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