Canadian Western Bank reports strong third quarter results.

EDMONTON, Alberta--(BUSINESS WIRE)--Sept. 7, 1995--CANADIAN WESTERN BANK (Alberta Stock Exchange: CWB) Canadian Western Bank today announced strong results for the third quarter of fiscal 1995.

Third Quarter Results: (three months ended July 31, 1995 compared with three months ended July 31, 1994)

- Net income was $3.0 million compared with $1.5 million.

- Net earnings per share were $0.37 basic and $0.34 fully diluted compared with $0.37 basic and $0.33 fully diluted.

- Net interest income and other income (excluding deduction for credit loss provision) was $11.1 million compared with $6.1 million.

- Provision for credit losses was $1.2 million compared with $510,000.

Nine Month Results: (nine months ended July 31, 1995 compared with nine months ended July 31, 1994)

- Net income was $7.6 million compared with $3.6 million.

- Net earnings per share were $1.06 basic and $0.97 fully diluted compared with $0.92 basic and $0.84 fully diluted.

- Net interest income and other income (excluding deduction for credit loss provision) was $29.7 million compared with $16.8 million.

- Provision for credit losses was $2.4 million compared with $1.5 million.

- Total assets were $1.3 billion compared with $646 million.

Larry Pollock, President and Chief Executive Officer, said the strong third quarter results reflect the significant increase in interest earning assets, 68 percent of which resulted from the addition of the lending assets of North West Trust (NWT) through an amalgamation earlier in the year. Erosion of a certain amount of the business gained through the amalgamation has been within the range anticipated by the Bank while internal growth from the Bank's preexisting operations has continued at a healthy rate. Completion of the amalgamation process is expected by fiscal year end, with most administrative changes such as branch consolidation, head office merging and portfolio conversions completed in, or subsequent to, the third quarter.

Mr. Pollock added he is pleased that, with most of the amalgamation activities successfully completed, management has been able to return its efforts to planning for future growth. The Bank plans to open a new branch in Courtenay, B.C. by December, 1995 and is reviewing other branch locations for 1996.

The productivity ratio, which is non-interest expenses expressed as a percentage of net interest income and other income, demonstrated continued progress in cost reduction in the third quarter of fiscal 1995, improving to 62.0 percent, compared with 67.3 percent in the previous year and 65.8 percent in the second quarter of 1995. Further productivity improvements are expected in the fourth quarter. Return on shareholders' equity for the first nine months of fiscal 1995 increased to 13.08 percent compared with 10.63 percent for the same period of fiscal 1994 and 12.76percent at the end of the second quarter. Return on average total assets increased to 0.85percent compared with 0.78percent.

Mr. Pollock noted that the higher provision for credit losses is due to the increased loan volumes resulting from the considerable growth of the Bank and, also, to the finalization of several pre-existing non-accrual loans. The ratio of net non-accrual loans to total loans increased from 1.4 percent to 1.9 percent , a significant part of which is attributable to loans originated by NWT. He said that the ratio of net non-accrual loans had decreased from 2.2 percent the previous quarter, and further reductions are expected.

Total loans increased to $1.15 billion up from $570 million at the comparable quarter end of fiscal 1994. Total deposits were $1.2 billion, up from $576 million.

The capital adequacy ratio at July 31, 1995 remained strong at 10.6 percent (Tier 1: 9.8 percent), compared with 10.2 percent (Tier 1: 8.8 percent) at July 31, 1994.

The outlook is for continuing strong results in the fourth quarter.

Canadian Western Bank is the only Schedule I chartered bank with its headquarters and principal operations in Western Canada. The Bank specializes in commercial loans, commercial real estate financing, equipment loans and leasing to businesses throughout Western Canada. Services to individuals are also provided through a competitive range of mortgages, consumer loans, deposit products and other retail banking services.

The common shares of Canadian Western Bank are listed on each of the Toronto, Vancouver and Alberta Stock Exchanges under the trading symbol "CWB".

CONTACT: Larry M. Pollock

Canadian Western Bank

403/423-8888

or

Jon W. Kieran or Cathy Hume

Investor Relations 

Kieran and Co. Inc.

416/868-1079