The Laurentian Bank logo in Montreal on June 21, 2016.Paul Chiasson/The Canadian Press
Laurentian Bank of Canada LB-T is cutting jobs and eliminating its equity research unit as the lender overhauls its business after a tumultuous year that saw its chief executive officer ousted.
Late last year, the bank embarked on a strategic review aimed at turning around its business after the lender failed to attract a buyer and a multi-day system outage prompted it to spend millions of dollars to compensate customers. Laurentian has said it would need to reduce its work force to rein in expenses, and it has already trimmed less profitable businesses.
Laurentian chief executive officer Éric Provost said Wednesday that the bank had made further reductions to its work force, according to an internal memo seen by The Globe.
“An essential component of our plan is to simplify the entire organization to increase our efficiency,” Mr. Provost said. “To date, we have created synergies and found ways to optimize our organizational structure. More action is needed however, in order to make substantial progress toward our priorities.”
Laurentian did not disclose the number of roles affected by the layoffs, but signalled last year that it would cut 2 per cent of its work force of 3,000 employees.
In a notice to clients viewed by The Globe, Laurentian said it discontinued its equity research, effective immediately, following a “reallocation of company resources.”
“These are not easy decisions to make, and we’re making sure to support the people affected by these changes in their transition,” Laurentian spokesperson Merick Seguin said in an e-mail statement. “This decision is part of the bank’s intention to simplify its organizational structure while optimizing its product offering, in order to focus on the areas in which it can differentiate itself as an organization.”
Mr. Provost plans to launch a new strategic plan later this month aimed at streamlining its operations and improving its performance. Laurentian reports second-quarter earnings on May 31, and will present its updated strategy to investors later that day.
The bank exited its retail brokerage business in April with the sale of $2-billion of assets under administration to Montreal-based financial services giant iA Financial Group.
The deal will move about 16,000 client accounts to iA subsidiary iA Private Wealth later this year from Laurentian’s retail full-service investment broker division, Laurentian Bank Securities Inc. About 30 securities-licensed investment advisers at Laurentian were “invited” to join iA.
In the first quarter ended Jan. 31, the bank’s profit missed analyst estimates. Expenses jumped 8 per cent from the same quarter a year prior as the bank upgraded its technology and operations, stemming from issues from the system outage.
Laurentian has allocated about $7-million to waiving customer fees and resolving the system issues.