Laurentian Bank Splits: Fairstone Takes Commercial, National Bank Retail
Laurentian Bank, a financial institution with over 175 years of history, is undergoing a significant transformation. In a $1.9 billion deal, the bank is being divided and sold off to two different entities. Fairstone Bank of Canada is set to acquire the commercial operations, while National Bank will take over the retail and small business segment at book value.
This strategic move comes after years of challenges for Laurentian Bank, as it struggled to revamp its operations or attract a satisfactory buyer. The agreement ensures that the Laurentian brand will endure under Fairstone’s umbrella, with the commercial segment’s headquarters staying put in Montreal and current CEO Éric Provost retaining his position.
Despite this continuity, the physical presence of Laurentian Bank in Quebec’s main streets will vanish. The 57 branches will not be integrated into National Bank, and employees will have the opportunity to apply for positions within the acquiring institutions.
The deal signals Laurentian’s enhanced focus on commercial services, including real estate lending, equipment financing, and capital markets activities. By teaming up with Fairstone Bank, Laurentian aims to expand its specialized commercial business while benefiting from improved technology and services available through National Bank.
Fairstone Bank’s acquisition will see Laurentian Bank shares valued at $40.50 each, pending approval by the majority of Laurentian Bank shareholders. Meanwhile, National Bank will absorb Laurentian’s retail and small business loans and deposits, fortifying its customer base in the process.
Overall, industry analysts view the deal positively, recognizing the benefits for both current shareholders and National Bank. The transaction marks a significant growth opportunity for Fairstone Bank and a strategic expansion for National Bank within its home province of Quebec.
Keyphrase: bank acquisition Laurentian
