Laurentian Bank Split Fairstone, National Bank Deal

Laurentian Bank is being divided and sold, with its commercial operations going to Fairstone Bank of Canada in a $1.9 billion deal, while National Bank acquires its retail and small business segment at roughly book value.

The move comes after years of challenges for the more than 175-year-old bank to find a turnaround or a buyer that satisfies shareholders.

Under the deal, the Laurentian brand will continue with Fairstone, whose commercial headquarters will remain in Montreal, with CEO Éric Provost staying on. However, the bank’s 57 retail branches in Quebec will not transfer to National Bank, and employees will need to apply for open roles at the acquiring banks.

The majority of Laurentian’s roughly 2,715 employees will be affected, though some may remain in the commercial operations with Fairstone. Provost said the deal accelerates Laurentian’s focus on its commercial business, including real estate lending, inventory and equipment financing, intermediary services, and capital markets activities.

Customers are expected to benefit from improved services and technology at National Bank, which addresses one of Laurentian’s challenges—its slow adoption of digital solutions, launching its first app only in recent years.

Fairstone will pay $40.50 per Laurentian share in cash, while National Bank’s payment will depend on closing balances. The Fairstone deal requires approval from a two-thirds majority of Laurentian shareholders.

The Caisse de dépôt et placement du Québec, owning about eight per cent of Laurentian shares, supports the deal, citing the competitive banking environment.

For Fairstone, this marks another growth step after its merger with Home Trust last year, expanding its customer base to roughly two million across 255 branches. National Bank will gain Laurentian’s $10.9 billion in retail loans and deposits, plus $1.4 billion in small- and medium-enterprise loans and deposits.

Analyst John Aiken of Jefferies described the deal as a favorable exit for Laurentian shareholders and a strategic boost for National Bank, which avoids dealing with legacy branch issues while acquiring assets and deposits at book value.