Tough Economy Makes Dent as ATB Reports First Quarter Results

Edmonton and Calgary— ATB Financial has posted first quarter income before provisions of $126.0 million, compared to $112.0 million during the same period last year.

“Even though we’re in a recession, we are seeing more optimism in the marketplace,” said Dave Mowat, ATB’s President & CEO. “But it’s still a very tough time for Albertans and their businesses. There are a lot of folks suffering from the effects of low commodity prices. We’ll need energy prices to improve for a sustained recovery to happen.”

When loan loss provisions were factored in, ATB’s net income for the quarter that ended June 30, 2016, stood at $25.0 million. That’s down 62.0 per cent from ATB’s net income in the same quarter a year ago.

ATB reported loan loss provisions of $93.5 million for the first quarter, up from $57.5 million in the same quarter last year. However, the provisions are significantly lower than the $190.8 million in provisions made in the quarter that ended March 31, 2016.

Non-interest expenses were $254.3 million, just over $2 million lower than the previous quarter. Mowat expects expenses to increase as ATB continues to invest in innovation.

“We’re committed to make banking work for our customers and that takes investment in new technologies,” Mowat said. “While that means our costs will grow over the course of the year, it also means more innovative ways to provide service to our customers and a better customer experience as a result.”

In the first few months of the year, ATB introduced a number of innovations to re-imagine banking for Albertans:

• ATB was one of only four financial institutions to offer Apple Pay when it expanded services in Canada. Here’s how we marked the occasion.

• ATB opened Entrepreneur Centres in Calgary and Edmonton. The Entrepreneur Centres are dedicated spaces where Alberta business owners can bank, collaborate and learn.

• ATB became the first Canadian financial institution to successfully test a cross-border payment using blockchain technology. What used to take two to six business days was achieved in a few seconds in a transfer to a bank in Germany.

• ATB and the Business Development Bank of Canada (BDC) announced an agreement to provide $1 billion in loans to Alberta-based small and mid-sized businesses.

Also in the first quarter, ATB authorized 3,132 loans to small and mid-sized Alberta businesses, 171 more than loans approved in the first quarter a year ago. The total value of the small and mid-sized business loans approved in the first quarter was $754.0 million, an increase of $23.8 million compared to the same quarter a year ago. ATB’s total loans outstanding to small and mid-sized businesses now stands at $7.3 billion, representing year-over-year growth of $632.2 million.

Another highlight of the first quarter was the strong performance of ATB Investor Services, which reported a net income of $8.1 million, up from $6.9 million in the same quarter a year ago.

In the first quarter, the wildfires in Fort McMurray triggered ATB’s disaster relief program, which featured emergency overdraft protection, increased credit limits and loan payment deferrals for ATB customers.

To hear more from Mowat, watch this video:

To find the full report on ATB’s first quarter, click here.