Laurentian Bank of Canada (LB) has begun a strategic review of its operations and is considering selling itself to another lender.
The Montreal-based bank has been struggling to turn itself around since 2020, and says the strategic review is intended to “maximize shareholder value.”
To that end, Laurentian Bank has hired JPMorgan Chase & Co. (JPM) to approach potential buyers.
Laurentian is Canada’s eighth biggest bank by assets and has a market capitalization of $1.46 billion. It primarily operates in Quebec.
For Canada’s larger national banks, a takeover of Laurentian would offer an opportunity to expand in Quebec.
While the federal government in Ottawa has rejected domestic bank mergers in recent years, Laurentian is smaller than the other lenders that dominate Canada’s banking sector.
Laurentian Bank has struggled to overcome several problems over the past decade, including customer misrepresentations on mortgages that it sold to another company.
Since 2020, Laurentian has overhauled its mortgage origination department and introduced a mobile banking app.
Laurentian Bank’s stock has declined 15% over the past 12 months to trade at $33.53 per share. The stock is down 27% over the last five years.
