ATB Financial recorded a net loss for the third quarter as it booked another substantial provider for asset-backed commercial paper (ABCP), the Alberta-based financial institution said Friday.

ATB reported a net loss of $85.8 million in the quarter ended Dec. 31, after realizing a $140 million increase in its provision for potential losses on ABCP.

Excluding the impact of provisions for ABCP, net income for this quarter was $54.2 million, down 25.2% from last year’s third quarter. “The drop reflects the impact of decreases in the prime lending rate, Canada’s competitive deposit market and increased operating expenses,” ATB said.

At Dec. 31, 2008, ATB’s results show assets of $25.7 billion (up 12.1% from last year’s third quarter), net loans of $21.4 billion (up 13.3%) and deposits, excluding wholesale of $20.2 billion (up 15.5%). Operating revenue, excluding the ABCP provision, was $226.2 million, up 7.4%.

The institution’s business loans grew to $8.6 billion (up 21.8% from last year’s third quarter), and personal loans grew to $4.8 billion (up 23.3%).

“Despite what Albertans might have heard about credit drying up or even disappearing, our loan activity demonstrates the power of 163 branches and more than 4,600 associates eager to serve our customers,” said Dave Mowat, ATB’s president and CEO, in a release.

Mowat also noted that ATB’s holdings in ABCP were restructured on Jan. 21, 2009. The institution’s $1.14 billion principal investment in ABCP has been converted to longer-term notes that reach maturity in six to nine years.

“ABCP was a challenging issue for our organization, and we’re eager to move forward with the benefit of lessons learned and an even stronger emphasis on our customers and associates,” Mowat said.

IE