DBRS places Laurentian’s credit ratings under review

By Staff | November 3, 2023 | Last updated on November 3, 2023
1 min read

DBRS Morningstar has placed its credit ratings for Montreal-based Laurentian Bank under review with negative implications, citing recent adverse developments.

Those developments include a leadership shakeup and a mainframe outage that lasted several days last month — events that followed the bank’s review of strategic options without a deal to sell.

In a release on Friday, DBRS said its designation of “under review with negative implications” reflected its view that these events have weakened the bank’s franchise strength and future growth prospects.

“[Laurentian’s] personal banking business, which has already had weaker earnings than its peers, has been under pressure with customer attrition, shrinking loans and stagnant deposits in recent years,” the release said.

“In DBRS Morningstar’s view, the mainframe outage that disrupted online access to retail and business accounts for four days could make it even more difficult for current management to turn around the important personal banking segment.”

The rating agency said it will assess the impact of the executive departures and “operational missteps” on the bank’s franchise and risk profile, along with the bank’s ability to improve earnings and future prospects.

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Advisor.ca staff


The staff of Advisor.ca have been covering news for financial advisors since 1998.