Laurentian Bank has announced that its provision for credit losses for the second quarter will be $80 million. That represents a $70 million more than initially projected. The additional provision for credit losses will be used to cover possible credit losses.

The bank cites several possible reasons for such losses, including:
– the loan of $25 million US (approximately $39 million CDN), which represents the bank’s total exposure to Teleglobe.
-the recent deterioration of the credit quality of some of its commercial loans; and
-the constitution of an unallocated provision to facilitate thestrategic repositioning of Commercial and Corporate lendingactivities, which represent 12% of the Bank’s total loan portfolio.

The goal of the strategic positioning review, says the bank is to allow it to better optimize the use of its total capital, which is in excess of $1 billion, and its total general reserves of $85 million. “This additional provision for credit losses is equivalent to a charge of $1.83 per common share and an impact of 0.4% on the Bank’s Tier 1 and Total capital ratios, which were 8.6% and 13.0% respectively at January 31, 2002. These ratios are in excess of the 7% and 10% statutory requirements for well capitalized financial institutions.”