The ratings on Laurentian Bank of Canada, including the 'A-1(Low)' Canadian national scale CP and 'P-2' Canadian national scale preferred stock ratings, are under pressure due to continued deterioration in the bank's financial performance when measured by return on assets and net interest margin compared with its major Canadian peers. Also, Laurentian Bank has exhibited considerable earnings volatility as a result of a few large single-name exposures and heightened pricing competition, which partially explain the lack of organic loan growth and deteriorating residential mortgage market share. Offsetting some of the concerns is the bank's market position as the third-largest banking organization in Quebec; its focus on a low-risk residential mortgage book; improved capital; and a healthy deposit base; which is
