The ratings on Laurentian Bank of Canada reflect its market position as the third-largest banking organization in Quebec; its focus on a low-risk residential mortgage book, which offsets the risk of other personal and commercial loans; and its stable deposit base, which is primarily made up of retail customer deposits. These credit strengths are offset by Laurentian Bank's smaller and less diversified franchise, and weaker although improving balance sheet and financial performance, when measured by return on assets and net interest margin compared with its major Canadian peers. The bank's wholesale lending operations are primarily to the Quebec market, where the economy has remained reasonably strong, and to some extent, to Ontario, where impaired loan levels have been rising due
