Laurentian Bank: A timeline of what’s happened with the lender in 2023

Laurentian Bank of Canada (LBC) is the ninth-largest publicly traded bank in Canada, primarily operating within the bank’s home province of Quebec. It boasts impressive financial figures, including over $1 billion in revenue, $57 million in income, $45 billion in total assets, and $2.5 billion in equity.

But the bank has experienced major upheaval recently. Following a proposed sale of the bank and a new strategic review that ended without a buyer, a new CEO was appointed in place of Rania Llewellyn. In this article, we’ll explore the timeline of recent significant events and decisions at Laurentian Bank, and whether it’s still a safe place to keep your money.

• June 2023: The bank puts feelers out for a possible buyer.
• July 11, 2023: The bank begins a strategic review, causing its shares to rise by more than 30% (soaring to more than $40 a share).
• July 28, 2023: The bank’s stock prices fall due to a lack of bids from potential buyers.
• September 14, 2023: The bank announces that it’s finished its strategic review and reveals that no buyer has shown interest in acquiring the financial institution. It will thus continue to be a stand-alone bank. The conclusion of the strategic review leads to a drop in stock prices as investors are worried no interested buyer signals that Laurentian could be in trouble. The failure to find a buyer leads to a 13% drop in Laurentian Bank’s share price, falling to $31.40. This is a significant decline compared to July when the bank’s stock reached $43 after the announcement of the review.
• September 24, 2023: The bank experiences an outage of its mainframe, which hosts transactional data, during a planned technology maintenance update. The system failure affects online transactions like bill payments, deposits, and transfers. The bank noted that customer’s financial information remained secure, as did customer data and deposits. However, some clients continue to experience outstanding issues related to the outage.
• October 2, 2023: The bank undergoes a major leadership change when Laurentian Bank Chief Executive Officer, Rania Llewellyn is unexpectedly terminated during a board meeting. Éric Provost, the former head of personal and commercial banking at the bank, is appointed as her successor. With Rania Llewellyn’s departure, Laurentian Bank’s previous chairman, Michael Mueller resigns — allegedly in protest over her abrupt termination.

The strategic review highlighted several areas of special focus to drive the bank forward, with an overarching emphasis on efficiency and simplification. Laurentian Bank’s goal is to enhance shareholder and stakeholder value by expediting the development of its existing strategic plan. Here are some key points.

Simplifying organizational structure

Laurentian Bank notes that it intends to streamline its organizational framework and carefully deploy capital and resources to primarily support its most profitable business segments and specialized offerings. The bank states that it will also continue to focus on prioritizing a customer-centric approach.

Leadership changes

As part of its goal to increase its focus on operational effectiveness and simplification, and to create a smaller executive team, the bank is expanding the roles of two of its most experienced management team members:

• Éric Provost: Formerly the head of commercial banking, Provost briefly became group head of personal & commercial banking to improve the customer experience. However, he is now president and CEO of Laurentian Bank.
• Sébastien Bélair: Bélair will now be the chief administrative officer, responsible for operations. This will be in addition to his current role as chief human resources officer. His mandate will be to streamline processes, increase efficiency, and enhance both customer and employee experiences.

Investor Day

Laurentian Bank says that it plans to unveil its updated strategic plan at an Investor Day in early 2024. The review emphasizes the bank’s desire to provide outstanding customer service, prioritizing deposits, refining its funding structure, and increasing efficiency through simplification.

The bank was first founded in 1846 as the Montreal City and District Savings Bank by the second Bishop of Montreal, Monsignor Ignace Bourget, and later decided to go public in 1965, listing its shares on the Montreal Stock Exchange. In an effort to broaden its reach throughout Canada, the bank then listed its shares on the Toronto Stock Exchange in 1983. And by 1987, it changed its name to the Laurentian Bank of Canada.

The financial institution continued to expand its operations throughout the late twentieth century, acquiring the General Trust Corporation and most of the Société Nationale de Fiducie’s assets. In 2000, the bank expanded further by acquiring Sun Life Trust Company stock. This buy resulted in the creation of the B2B Trust subsidiary, currently known as B2B Bank.

In 2020, Rania Llewellyn assumed the roles of president and CEO, succeeding the interim CEO, Stephane Therrien, who had been fulfilling the duties following the retirement of Francois Desjardins in June 2020. She was brought in to oversee the bank’s strategic direction.

With her appointment, Llewellyn became the first woman to lead a major Canadian bank. Her mandate was to revitalize the bank by focusing on specialized niches, customer experience, technology upgrades, and improving the bank’s online platforms, including introducing a mobile banking app. This allows it to compete with online banks that offer mobile services without needing to enter a branch.

Given the bank’s ongoing systems issues, it’s natural to wonder whether your money is safe with Laurentian Bank. The bank recently received a credit risk downgrade because of its struggles, which isn’t a good sign for the company.

Despite the current challenges facing the institution, customers’ funds are secure and protected. That’s because Laurentian is a member of the Canada Deposit Insurance Corporation (CDIC). As a member of the CDIC, eligible deposits up to $100,000 per account category (such as savings and chequing accounts, joint accounts, RRSPs, GICs, and more) are insured.