The ratings on Montreal, Que.-based Laurentian Bank of Canada reflect a stabilized franchise; improving core operating results, albeit still substandard for the rating level; and market share position holding its own in loans and deposits. The strong core customer funding and lower credit risk profiles, which provide an element of support to the ratings, have helped position the bank for more stable future financial performance. Capital, when Standard & Poor's Ratings Services adjusts for the pension and postretirement benefit liabilities shortfall, is below average and thus reduces financial flexibility. Despite Laurentian Bank's efforts to improve overall performance, profitability is expected to remain considerably below the more highly rated and better diversified Canadian peers. Standard & Poor's believes that the franchise
