Canada’s financial sector earned operating profits of $19.2 billion in the third quarter of 2008, up 3.3% from the second quarter, Statistics Canada reported on Thursday.

The three months prior to October’s financial meltdown were particularly strong for insurance carriers. Life, health, and medical insurance carriers’ profits grew despite flat revenue growth, as lower expenses in the quarter helped push profits higher.

Banks and other depository credit intermediaries experienced the largest drop in the financial sector for the quarter, as interest revenue from all sources declined. This marked the fourth consecutive quarter in which operating profits have retreated for banks. The last time this occurred was in 1989.

The financial sector’s operating profit is down 8.5% from $21 billion in the third quarter of last year.

Financial sector operating revenue for the quarter was $76.1 billion, up 0.8% from $75.5 billion in the second quarter, and down 1.8% from $77.5 billion in the third quarter of 2007.

Net profit for the quarter was $11.9 billion, down 1% from $12 billion in the second quarter, and down 8.7% from $13 billion in the third quarter of 2007.

Canadian corporations overall earned $77.3 billion in operating profits in the quarter, up 7.6% from the second quarter, and up 11.7% from the same period last year.

Profits in the non-financial sector grew 9.1% to $58.1 billion, led by strong performance among oil and gas extractors and petroleum and coal manufacturers.

Revenue growth slowed across all sectors in the third quarter.

IE