Laurentian Bank of Canada

The negative outlook reflects the possibility that operational missteps and executive turnover could hurt LBC's franchise strength because of lost client relationships, high technology, legal, or regulatory expenses, or strategic uncertainty. We will evaluate the bank's progress on stronger governance on technology issues, improvements in profitability and productivity, and resumption of growth, particularly in the retail banking platform. We believe that continued execution of the strategy, if successful, could add to financial strength and improve the standing of the franchise over time, decreasing reputational risks. We could lower the ratings within the next two years if: There are clear signs that the franchise has been negatively affected by recent events; LBC's evolving strategy fails to generate the expected incremental improvements

...Uncertainty remains around Laurentian Bank of Canada's strategy Recent significant executive changes and a major mainframe outage suggest that operational missteps and executive turnover could hurt Laurentian Bank of Canada's (LBC's) franchise strength, perhaps because of lost client relationships; elevated technology, legal, or regulatory expenses; or strategic uncertainty. S&P Global Ratings believes that management will remain appropriately focused on making efforts to strengthen IT governance, restore confidence in the bank's franchise, and refresh the bank's strategy for growth. Increasing core customer deposits remains the goal LBC has recently seen relatively strong growth in GICs, given high interest rates, and a decrease in personal and commercial demand deposits similar to peers. The bank remains focused on improving deposit originations from its branches, which have been limited. We believe growth in demand deposits will return once rates begin to decline....

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