Montreal-based Laurentian Bank ups amount of problem mortgages to $392M as it repurchases portion
Laurentian Bank of Canada says the amount of problematic loans discovered in its mortgage portfolio has increased from $304 million to $392 million.
But the lender says it is has repurchased $180 million of the problematic mortgages, with further $88 million expected to be repurchased by the end of the lender's second fiscal quarter.
The Montreal-based bank (TSX:LB) revealed in December that through an audit of $655 million in B2B Bank mortgages it sold to one unnamed third party, that it had initially planned to repurchase as much as $304 million of problematic mortgages.
Laurentian Bank's chief executive said at the time that issues largely involved loans that were misflagged and it found no evidence of wilful wrongdoing.
He also said a smaller percentage of the problematic mortgages involved a failure to obtain or properly store documentation such as proof of income needed to adjudicate the loan.
Laurentian Bank spokeswoman Helen Soulard says the mortgage repurchases are not expected to be material to the lender's operations, funding or capital.