As Alberta’s economy has improved, so too have ATB Financial’s earnings.

ATB, reporting for the quarter ending December 31, 2016, says its net income for the quarter was $65 million–double its net earnings of $32.5 million for the same quarter a year ago. In a release, the institution says it credits the gain to “a sharp decrease in loan loss provisions.”

Loan loss provisions for ATB’s third quarter were $16.9 million, compared to $91.3 million in the third quarter a year earlier. In its release, ATB says, “The decrease in loan loss provisions is a result of improvements in Alberta’s economy and ATB’s decision to guide customers.” The institution adds businesses are getting used to lower energy prices and gaining confidence.

ATB also reports a rise in assets under administration, which ended the quarter at $16 billion, compared to $14.2 billion in the same quarter a year earlier. In its earnings report, the bank says, “Year-over-year growth of $1.7 billion (12.2%) includes $0.7 billion from asset-gathering activities and $1 billion from market returns.”

Still, Alberta’s economy remains slow. ATB says that’s weighing on operating revenues, which dropped to $350.2 million during the third quarter, down from $379.7 million during the same quarter a year ago. Still, ATB notes it will keep investing in key areas like technology.

ATB has more than 700,000 customers and about 5,000 employees.

Read: Best source of dividend growth in Canada, for more on banks

Economic outlook

ATB is cautiously optimistic about Alberta’s future.

In its earnings report, it points to the recent improvement in oil prices–on the back of OPEC’s decision to cut production. Still, ATB expects “global oil supplies will remain elevated throughout 2017, and many are worried about increasing stockpiles in the U.S. [that] may keep oil prices subdued throughout the year.”

The good news, the institution adds, is “the price of West Texas Intermediate (WTI) is expected to average US$53 per barrel in 2017 and rise to US$55 per barrel in 2018. […] In 2017, investment in conventional oil and gas projects is expected to pick up while layoffs taper off.”

Agriculture is a weak spot for Alberta, says ATB. Further, “new housing starts also continue to decrease as a result of a weak labor market and interprovincial migration. However, the strong housing market in the U.S. continues to benefit the forestry sector, while the low Canadian dollar has benefited tourism and agriculture.”

Another concern is the future of NAFTA and other trade deals, but ATB says real GDP in Alberta will likely “grow by 2.1% in 2017.”


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