Laurentian Bank’s Big Shift and What Its Sale Really Means
So, here’s what’s been unfolding around Laurentian Bank, and it’s a pretty major shake-up in Canada’s banking world. After years of trying to compete in the retail space and even attempting to find a buyer in 2024 without much success, Laurentian has now reached a pair of sweeping agreements that essentially reshape its entire future.
The bank is set to be taken over by Fairstone Bank of Canada in an all-cash deal valued at about $1.9 billion. At the same time, it’s selling off its retail banking division and its small-and-medium-sized business portfolio to National Bank of Canada. This is all part of a deliberate shift by Laurentian to move away from traditional retail operations and double down on becoming a specialty commercial bank.
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What’s happening, essentially, is a full strategic pivot. Laurentian will now focus on areas where it believes it can compete with strength—things like commercial real estate lending, equipment and inventory financing, intermediary services, and capital markets. By joining forces with Fairstone, its commercial lending arm will be combined with Fairstone’s, giving both entities more market power and a broader national presence. Fairstone’s CEO Scott Wood has already highlighted Québec as a key market and signaled excitement about the expanded capabilities they’ll gain through Laurentian’s expertise.
Now, financially speaking, Fairstone is acquiring Laurentian’s shares at $40.50 apiece, which is roughly a 20 percent premium over where the stock closed on December 1. For investors, that’s a respectable upside, especially considering the challenges the bank has faced in recent years. Even the Caisse de dépôt et placement du Québec, which owns around 8 percent of Laurentian’s shares, has agreed to vote in favour of the deal, provided certain conditions are maintained—like keeping Laurentian’s commercial head office in Montreal.
On the National Bank side, the deal gives them Laurentian’s retail clients, SME accounts, and its syndicated loan portfolio. That includes over $3 billion in retail loans and more than $7.5 billion in retail deposits. It’s a substantial boost for National Bank, allowing them to strengthen their footprint in Quebec without having to inherit the cost and complexity of operating Laurentian’s 57-branch network. Those branches will be closed once the transition is complete, and employees from those locations won’t be automatically transferred—but they’ll be given pathways to apply for roles at National Bank.
Through all this, Laurentian’s CEO, Éric Provost, is staying on board to guide the bank through its transformation, maintaining the Laurentian brand and its Montreal headquarters. And even though this is a huge shift, daily operations will continue as usual until everything officially closes.
It really is a moment of reinvention—one that arrived faster than many analysts expected—but in the long run, it positions Laurentian as a much more focused and competitive player in the commercial banking space.
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