Bank says it moves closer to specialty focus
Laurentian Bank of Canada reported a net loss of $20.5 million for the first quarter of 2026, a reversal from a $38.6 million profit in the same period a year earlier, as the lender absorbed heavy costs linked to its strategic overhaul.
The Montreal-based bank posted a diluted loss of $0.58 per share for the three months ended Jan. 31, 2026, compared with diluted earnings of $0.76 per share in the first quarter of 2025, according to results released Friday.
Restructuring and impairment charges totalled $61.2 million – or $45.0 million after income taxes – driven largely by the bank’s decision to exit retail and small- and medium-sized enterprise (SME) banking and focus on becoming a specialty commercial lender. Transaction and conversion costs of $11.0 million tied to deals announced in December 2025 also weighed on earnings.
Excluding those items, adjusted net income reached $34.2 million, or $0.65 per diluted share, down from $39.4 million, or $0.78 per share, a year earlier.
Revenue edges higher
Total revenue increased $1.9 million year-over-year to $251.6 million. Net interest income rose $8.7 million, or 5%, to $194.9 million, supported by loan growth and pricing dynamics.
Other income declined $6.7 million to $56.7 million, partly reflecting lower gains from financial instruments.
Capital position and efficiency
The bank’s efficiency ratio rose to 106.3% on a reported basis from 74.9% a year earlier, reflecting the impact of restructuring charges. On an adjusted basis, the ratio increased more modestly to 76.7% from 74.3%.
The Common Equity Tier 1 (CET1) capital ratio stood at 10.9% as at Jan. 31, 2026, down 40 basis points from 11.3% in the previous quarter but remaining within regulatory requirements.
Strategic transactions progress
The quarterly results unfolded alongside major corporate developments tied to the bank’s transformation.
In December 2025, Laurentian Bank reached agreements with National Bank of Canada to sell its retail and SME banking portfolios and its syndicated loan portfolio. Separately, Fairstone Bank of Canada agreed to acquire all outstanding common shares of Laurentian Bank.
On Feb. 5, 2026, shareholders approved the Fairstone acquisition with 98.8% voting in favour at a special meeting, surpassing the required two-thirds threshold. The transactions remain subject to regulatory approvals and are expected to close by late 2026.
On Feb. 17, 2026, the bank completed the sale of its syndicated loan portfolio to National Bank for $646 million in cash. The portfolio had an outstanding principal balance of about $705 million, reflecting a $50 million discount. Laurentian expects to record a pre-tax loss of roughly $20 million on the transaction in the second quarter of 2026.
Assets and dividend
Total assets stood at $49.9 billion as at Jan. 31, 2026. Total loans – including those classified as held for sale under the National Bank transactions – reached $36.4 billion, up $0.4 billion from the prior quarter, driven by growth in commercial lending.
President and chief executive officer Éric Provost said the quarter reflects progress in executing the bank’s focused strategy despite ongoing change.
“This momentum is a direct reflection of our disciplined approach and the consistency of our execution,” Provost said. “Our solid capital and liquidity positions allow us to move forward with confidence.”
He described the period as a turning point for the institution and acknowledged the impact of transaction-related charges on reported results while highlighting underlying business performance.
“Our core commercial businesses demonstrated solid underlying growth, consistent with our transformation plan,” Provost said. “I want to recognize the commitment and professionalism of our employees, who are navigating this period of change with resilience, integrity, and a strong focus on serving our customers.”
The board declared a quarterly common share dividend of $0.47 per share on Thursday, payable May 1, 2026, to shareholders of record on April 1, 2026. The dividend is unchanged from the previous quarter and the prior year.
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