Laurentian Bank to Split and Sell Commercial Operations
In a move that has changed the face of the banking industry in Canada, Laurentian Bank has signed agreements to split and sell its commercial operations. The bank has decided to sell its commercial operations to Fairstone Bank and the retail and small medium enterprise (SME) banking portfolio to National Bank of Canada. This significant decision comes after a strategic review of its operations conducted in 2023. The bank had initially considered a possible sale but didn’t find a suitable buyer. You can read more about the strategic review here.
Details of the Deal with Fairstone Bank
Under the agreement, Fairstone Bank will pay C$40.50 per share in cash, a 20% premium over Laurentian’s closing share price of $33.76 as of 1 December 2025. This brings the total deal value to C$1.9bn ($1.4bn). The expected closing of this transaction is slated for late 2026, subject to approval from regulatory bodies and shareholders and fulfilment of other customary closing conditions.
Fairstone Bank expects the acquisition to bolster its scale in commercial real estate and expand its business lines in inventory and equipment financing. The Laurentian brand will continue to exist and will become part of Fairstone, with the commercial segment’s head office remaining in Montreal. The present chief executive of Laurentian Bank, Éric Provost, will continue in his role.
Details of the Deal with National Bank of Canada
Before the deal with Fairstone is completed, National Bank of Canada will acquire all Retail/SME assets and liabilities of Laurentian Bank. The payment to be made by National Bank will be based on the outstanding balances at the time of closing. As of 31 July, Laurentian Bank had retail loans and deposits worth C$3.3bn and C$7.6bn, respectively, while the SME loans and deposits totalled C$0.8bn and $0.6bn, respectively.
In addition to this, National Bank will also take over the distribution for certain mutual funds, with underlying funds totalling C$3.4bn. Laurentian Bank will close its branches in Québec and manage staff changes before the transfer of its retail and SME business. No staff or retail branches will be moved to National Bank, but they will be either terminated or reassigned to other business lines or to Fairstone Bank.
Impact of the Deal
The president and CEO of National Bank, Laurent Ferreira, believes this transaction aligns with their domestic growth strategy. He said, “Leveraging our strong presence in Québec, this transaction aligns with our domestic growth strategy and is a natural fit. We look forward to welcoming Laurentian Bank’s retail, SME, and syndicated loan clients, who will soon benefit from National Bank’s leading digital services, an expanded range of financial products, and access to our extensive branch network and business banking teams.”
Éric Provost, CEO of Laurentian Bank, echoed this sentiment, stating, “This announcement is aligned with the acceleration of Laurentian Bank’s commercial specialisations, as announced in our 2024 Strategic Plan. Joining forces with Fairstone Bank will allow us to grow our specialised commercial business even further, while maintaining our brand identity and head office in Montreal, where we were founded over 175 years ago. Partnering with National Bank will allow our customers to benefit from a broader range of services and improved, modern technology.”
The deal has been unanimously recommended by a special committee of Laurentian’s board that was formed to oversee the process. La Caisse, which holds around 8% of Laurentian shares, has agreed to support the deal, subject to certain conditions. The details of this landmark transaction and its implications for the banking industry are available in the original source here.
