OTTAWA -- Corporate profits surged 10.6 per cent in the first quarter of this year as the oil and gas sector sizzled and bank profits hit a seven-quarter high, says Statistics Canada. Of 24 industry groups surveyed, 15 reported first-quarter profit gains but growth was dominated by the energy sector and chartered banks, the agency said yesterday.

Overall "operating profits of $42.9 billion were the highest since the fourth quarter of 2000," it said.

After-tax profits came in at $22.7 billion.

"Profits have now risen for five consecutive quarters after slumping throughout 2001."

However, if the oil and gas extraction and refining industries and the banks are excluded, corporate profits posted a much more modest 1.2 per cent quarter-to-quarter improvement.

The financial sector recorded operating profits of $9.2 billion and after-tax profits of $4.9 billion, advances of 7.7 per cent and 14.6 per cent, respectively, from the fourth quarter of 2002.

"The profits of depository credit intermediaries -- mainly chartered banks -- reached a seven-quarter high of $4.1 billion, up 25 per cent from the fourth quarter," Statistics Canada reported.

"Reduced provisions for future loan losses, coupled with lower realized losses on the disposal of investments, contributed to the current quarter profit growth. Net interest income declined slightly."

Non-financial industries earned a record $33.7 billion in operating profits, up 11.5 per cent from the fourth quarter and 57.2 per cent ahead of profits earned in the fourth quarter of 2001, the low point of the recent profit downturn.

The after-tax profit for non-financial industries was $20 billion, an 8.5 per cent gain from the fourth quarter of 2002.

The statistics cover all corporations in Canada, excluding government-controlled and not-for-profit companies.