Research Update: Laurentian Bank of Canada Ratings Placed On CreditWatch Negative On Plan To Exit Retail Banking Business

On Dec. 2, 2025, Laurentian Bank of Canada (LBC) announced a transformative strategic shift, agreeing to be acquired by Fairstone Bank of Canada while simultaneously selling its retail and small and medium-sized banking portfolio, effectively exiting its retail banking business. We anticipate that, at deal close, LBC?s funding profile will materially weaken, while its less diversified business model will increase credit and concentration risk. As a result, we placed our ?BBB/A-2? ratings on LBC on CreditWatch with negative implications. The CreditWatch negative placement reflects our expectation that the likelihood of the acquisitions closing is high, and that, in such a scenario, we could lower our long- and short-term issuer ratings on LBC by one notch. On Dec. 15, 2025, S&P

...Rating Component Scores Issuer Credit Rating ###/Watch Neg/A-2 SACP ### Anchor a- Business position Constrained (-2) Capital and earnings Adequate (0) Risk position Adequate (0) Funding and liquidity Adequate and Adequate (0) Comparable ratings analysis 0 Support 0 ALAC support 0 GRE support 0 Group support 0 Sovereign support 0 Additional factors 0 SACP--Stand-alone credit profile. ALAC--Additional loss-absorbing capacity. GRE--Government- related entity....

Research Update