Laurentian Bank of Canada

The negative outlook reflects uncertainty around execution of a revamped strategy and its associated impact on financial performance. The negative outlook also reflects recent deficiencies in LBC's technology platform, in particular its customer-facing applications. We will evaluate the bank's progress on stabilizing financial performance, improving productivity, attracting core deposits, and maintaining adequate IT systems. We believe that proper execution of the strategy could strengthen LBC's financial performance and improve the franchise's standing. We could lower the ratings within the next two years if: LBC's evolving strategy fails to stabilize financial performance; The bank fails to demonstrate improvement in technology and governance; We see evidence of meaningful additional senior executive turnover; Liquidity metrics weaken; or Loan losses are outsize relative to

...Laurentian Bank of Canada faces a number of challenges. The bank is facing uncertainty around execution of a revamped strategy, deficiencies in its technological platforms, financial performance weakness, and difficulty in increasing core retail deposits. S&P Global Ratings expects management will remain focused on its strategy to strengthen the franchise. Specifically, LBC is focused on enhancing capabilities in foundational technology infrastructure and reducing complexity and cost structure to improve profitability and competitiveness. It also is focused on reducing expenses of the personal bank segment in line with revenue and strengthening core deposit gathering, and continuing to improve customer experience. The bank is more exposed to higher-risk loan categories than some peers, which could lead to higher net charge-offs in a down market. Laurentian Bank of Canada (LBC) is more exposed to riskier loan categories, including Alt-A mortgage and equipment and inventory financing. It...

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