May 29, 2020

Laurentian Bank chopped its dividend today:

At its meeting held on May 28, 2020, given the highly uncertain economic environment, the Board of Directors of the Laurentian Bank of Canada (TSX: LB) (the “Bank”) has approved a reduction of the quarterly dividend on its common shares by $0.27 or 40% to provide greater financial strength and flexibility to support continued growth, the pursuit of the Bank’s Strategic Plan, and the alignment of the Bank’s payout ratio with the Bank’s policy.

… and the stock got hammered, down 9.14% with volume at a thirty-day (at least) high. Paul Chiasson comments in the Globe:

Laurentian Bank of Canada slashed its dividend by 40 per cent on Friday after a sharp drop in profit, becoming the first large Canadian bank to cut its payout in nearly 30 years.

The Montreal-based bank came into the COVID-19 crisis on a back foot, having struggled in recent years with wage disputes and a challenging transition toward digital banking that has seen it shutter many branches and phase out teller services.

Canada’s seventh largest bank reported a 79-per-cent drop in profit for the three months ended April 30, with net income falling to $8.9-million from $43.3-million in the same quarter last year. The decline was largely attributed to a spike in provisions for potential loan losses tied to weakening economic conditions.

Laurentian responded by cutting its quarterly dividend to 40 cents a share, down from 67 cents. This is the first time a large Canadian bank has cut its dividend since National Bank of Canada did so in 1992, according to data from Refinitiv.

The bank’s capital position deteriorated slightly in the quarter, with the closely watched common equity Tier 1 ratio falling to 8.8 per cent from 9 per cent. The bank said it now expects its capital levels ”will remain below the level observed over the recent quarters.”

The preferreds were relatively unscathed, with LB.PR.H down 1.5% on elevated volume and LB.PR.J down 0.38% on slightly above average volume.

HIMIPref™ Preferred Indices
These values reflect the December 2008 revision of the HIMIPref™ Indices

Values are provisional and are finalized monthly
Index Mean
Current
Yield
(at bid)
Median
YTW
Median
Average
Trading
Value
Median
Mod Dur
(YTW)
Issues Day’s Perf. Index Value
Ratchet 0.00 % 0.00 % 0 0.00 0 -0.6654 % 1,411.5
FixedFloater 0.00 % 0.00 % 0 0.00 0 -0.6654 % 2,590.0
Floater 5.47 % 5.89 % 32,434 13.97 4 -0.6654 % 1,492.6
OpRet 0.00 % 0.00 % 0 0.00 0 0.0926 % 3,417.0
SplitShare 4.92 % 5.15 % 61,165 3.89 7 0.0926 % 4,080.6
Interest-Bearing 0.00 % 0.00 % 0 0.00 0 0.0926 % 3,183.8
Perpetual-Premium 0.00 % 0.00 % 0 0.00 0 0.2170 % 2,946.3
Perpetual-Discount 5.71 % 5.94 % 78,973 13.95 35 0.2170 % 3,160.2
FixedReset Disc 6.45 % 5.28 % 177,909 14.58 83 0.6730 % 1,766.3
Deemed-Retractible 5.44 % 5.78 % 90,841 14.05 27 0.0941 % 3,127.8
FloatingReset 5.12 % 5.22 % 47,479 15.19 3 1.5156 % 1,759.7
FixedReset Prem 0.00 % 0.00 % 0 0.00 0 0.6730 % 2,442.7
FixedReset Bank Non 2.00 % 3.60 % 151,856 1.63 2 0.1865 % 2,755.4
FixedReset Ins Non 6.74 % 5.36 % 112,051 14.49 22 0.2940 % 1,770.3
Performance Highlights
Issue Index Change Notes
BAM.PR.B Floater -2.76 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 7.40
Evaluated at bid price : 7.40
Bid-YTW : 5.89 %
BAM.PR.K Floater -2.00 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 7.35
Evaluated at bid price : 7.35
Bid-YTW : 5.93 %
BAM.PF.E FixedReset Disc -1.77 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 12.74
Evaluated at bid price : 12.74
Bid-YTW : 6.24 %
CCS.PR.C Deemed-Retractible -1.50 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 21.21
Evaluated at bid price : 21.21
Bid-YTW : 5.90 %
TRP.PR.H FloatingReset -1.45 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 7.27
Evaluated at bid price : 7.27
Bid-YTW : 5.22 %
BAM.PR.C Floater -1.33 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 7.40
Evaluated at bid price : 7.40
Bid-YTW : 5.89 %
IFC.PR.E Deemed-Retractible -1.17 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 22.55
Evaluated at bid price : 22.85
Bid-YTW : 5.78 %
MFC.PR.H FixedReset Ins Non -1.10 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 16.22
Evaluated at bid price : 16.22
Bid-YTW : 5.52 %
BIK.PR.A FixedReset Disc -1.05 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 22.05
Evaluated at bid price : 22.51
Bid-YTW : 6.48 %
MFC.PR.L FixedReset Ins Non -1.05 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 13.21
Evaluated at bid price : 13.21
Bid-YTW : 5.33 %
IAF.PR.G FixedReset Ins Non -1.00 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 14.80
Evaluated at bid price : 14.80
Bid-YTW : 5.54 %
BMO.PR.W FixedReset Disc 1.00 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 14.14
Evaluated at bid price : 14.14
Bid-YTW : 5.16 %
BNS.PR.G FixedReset Disc 1.03 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 24.21
Evaluated at bid price : 24.61
Bid-YTW : 5.23 %
ELF.PR.H Perpetual-Discount 1.04 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 23.11
Evaluated at bid price : 23.40
Bid-YTW : 5.95 %
TD.PF.K FixedReset Disc 1.05 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 16.41
Evaluated at bid price : 16.41
Bid-YTW : 5.13 %
ELF.PR.G Perpetual-Discount 1.06 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 21.05
Evaluated at bid price : 21.05
Bid-YTW : 5.73 %
BAM.PR.Z FixedReset Disc 1.08 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 14.91
Evaluated at bid price : 14.91
Bid-YTW : 6.07 %
PVS.PR.H SplitShare 1.17 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2027-02-28
Maturity Price : 25.00
Evaluated at bid price : 24.30
Bid-YTW : 5.21 %
TRP.PR.C FixedReset Disc 1.21 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 8.34
Evaluated at bid price : 8.34
Bid-YTW : 5.81 %
GWO.PR.I Deemed-Retractible 1.23 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 19.79
Evaluated at bid price : 19.79
Bid-YTW : 5.79 %
MFC.PR.R FixedReset Ins Non 1.24 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 19.56
Evaluated at bid price : 19.56
Bid-YTW : 5.45 %
BMO.PR.T FixedReset Disc 1.26 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 13.69
Evaluated at bid price : 13.69
Bid-YTW : 5.23 %
BIP.PR.D FixedReset Disc 1.30 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 19.50
Evaluated at bid price : 19.50
Bid-YTW : 6.42 %
BMO.PR.E FixedReset Disc 1.34 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 16.63
Evaluated at bid price : 16.63
Bid-YTW : 5.14 %
PWF.PR.S Perpetual-Discount 1.37 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 20.75
Evaluated at bid price : 20.75
Bid-YTW : 5.86 %
HSE.PR.E FixedReset Disc 1.38 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 11.05
Evaluated at bid price : 11.05
Bid-YTW : 9.77 %
IAF.PR.B Deemed-Retractible 1.54 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 20.48
Evaluated at bid price : 20.48
Bid-YTW : 5.62 %
BMO.PR.C FixedReset Disc 1.62 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 18.20
Evaluated at bid price : 18.20
Bid-YTW : 5.23 %
RY.PR.W Perpetual-Discount 1.72 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 23.36
Evaluated at bid price : 23.65
Bid-YTW : 5.20 %
SLF.PR.I FixedReset Ins Non 1.72 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 14.75
Evaluated at bid price : 14.75
Bid-YTW : 5.36 %
BIP.PR.E FixedReset Disc 1.79 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 19.38
Evaluated at bid price : 19.38
Bid-YTW : 6.46 %
IFC.PR.A FixedReset Ins Non 1.94 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 11.01
Evaluated at bid price : 11.01
Bid-YTW : 5.28 %
CM.PR.Y FixedReset Disc 2.08 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 20.60
Evaluated at bid price : 20.60
Bid-YTW : 5.25 %
BMO.PR.D FixedReset Disc 2.12 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 17.36
Evaluated at bid price : 17.36
Bid-YTW : 5.28 %
TRP.PR.A FixedReset Disc 2.21 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 11.25
Evaluated at bid price : 11.25
Bid-YTW : 5.82 %
TD.PF.D FixedReset Disc 2.44 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 15.55
Evaluated at bid price : 15.55
Bid-YTW : 5.14 %
RY.PR.M FixedReset Disc 2.74 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 14.61
Evaluated at bid price : 14.61
Bid-YTW : 5.15 %
PWF.PR.A Floater 2.79 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 9.20
Evaluated at bid price : 9.20
Bid-YTW : 4.70 %
HSE.PR.A FixedReset Disc 3.09 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 6.00
Evaluated at bid price : 6.00
Bid-YTW : 9.03 %
RY.PR.J FixedReset Disc 3.55 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 15.75
Evaluated at bid price : 15.75
Bid-YTW : 4.96 %
TD.PF.E FixedReset Disc 3.76 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 15.73
Evaluated at bid price : 15.73
Bid-YTW : 5.22 %
SLF.PR.G FixedReset Ins Non 3.84 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 9.20
Evaluated at bid price : 9.20
Bid-YTW : 4.82 %
CU.PR.C FixedReset Disc 4.26 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 15.67
Evaluated at bid price : 15.67
Bid-YTW : 4.53 %
TRP.PR.F FloatingReset 4.72 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 9.80
Evaluated at bid price : 9.80
Bid-YTW : 5.50 %
GWO.PR.N FixedReset Ins Non 5.08 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 9.30
Evaluated at bid price : 9.30
Bid-YTW : 4.60 %
TRP.PR.G FixedReset Disc 6.38 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 14.00
Evaluated at bid price : 14.00
Bid-YTW : 5.99 %
PWF.PR.P FixedReset Disc 17.18 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 9.55
Evaluated at bid price : 9.55
Bid-YTW : 5.24 %
Volume Highlights
Issue Index Shares
Traded
Notes
BMO.PR.T FixedReset Disc 116,256 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 13.69
Evaluated at bid price : 13.69
Bid-YTW : 5.23 %
RY.PR.H FixedReset Disc 106,400 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 14.61
Evaluated at bid price : 14.61
Bid-YTW : 4.92 %
TD.PF.A FixedReset Disc 101,636 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 14.24
Evaluated at bid price : 14.24
Bid-YTW : 5.11 %
BMO.PR.S FixedReset Disc 100,177 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 14.11
Evaluated at bid price : 14.11
Bid-YTW : 5.27 %
CM.PR.R FixedReset Disc 96,398 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 17.51
Evaluated at bid price : 17.51
Bid-YTW : 5.54 %
MFC.PR.C Deemed-Retractible 59,380 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 20.32
Evaluated at bid price : 20.32
Bid-YTW : 5.55 %
There were 18 other index-included issues trading in excess of 10,000 shares.
Wide Spread Highlights
Issue Index Quote Data and Yield Notes
CU.PR.C FixedReset Disc Quote: 15.67 – 18.00
Spot Rate : 2.3300
Average : 1.4781

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 15.67
Evaluated at bid price : 15.67
Bid-YTW : 4.53 %

BMO.PR.C FixedReset Disc Quote: 18.20 – 19.51
Spot Rate : 1.3100
Average : 0.7303

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 18.20
Evaluated at bid price : 18.20
Bid-YTW : 5.23 %

TD.PF.D FixedReset Disc Quote: 15.55 – 18.80
Spot Rate : 3.2500
Average : 2.7136

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 15.55
Evaluated at bid price : 15.55
Bid-YTW : 5.14 %

MFC.PR.F FixedReset Ins Non Quote: 8.99 – 10.20
Spot Rate : 1.2100
Average : 0.6991

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 8.99
Evaluated at bid price : 8.99
Bid-YTW : 4.99 %

MFC.PR.Q FixedReset Ins Non Quote: 15.21 – 16.38
Spot Rate : 1.1700
Average : 0.7224

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 15.21
Evaluated at bid price : 15.21
Bid-YTW : 5.30 %

BIK.PR.A FixedReset Disc Quote: 22.51 – 24.00
Spot Rate : 1.4900
Average : 1.1496

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-05-29
Maturity Price : 22.05
Evaluated at bid price : 22.51
Bid-YTW : 6.48 %

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