At a time when it is promising to repair bridges with its customers burned by the computer outage in September, the Laurentian Bank is laying off 2% of its employees. His new boss assures that the decision will not have a negative effect on customers.
“We are very cautious about how layoffs could impact our clients and in no way are we aiming to reduce service,” assures the president and CEO of Laurentian Bank, Éric Provost, in an interview on Thursday. In fact, I really want to improve it. »
Overall, 55 employees learned they were losing their jobs this week. The Montreal financial institution specified that a “majority” of the targeted employees were located outside Quebec.
Arriving in office at the beginning of October, Mr. Provost believes that the Laurentian Bank has not done enough to reduce the burden of its expenses. “I believe that we did not attack the reduction in expenditure at the speed that should have been required to achieve the objectives that we set for ourselves last year. »
We will have to wait until next spring to know the details of the new strategic plan. Mr. Provost says he wants to simplify the bank’s activities and focus on customer satisfaction.
Another strategic plan
This is not the first time that renewal has been promised at the head of the Laurentian Bank. In 2015, François Desjardins pleaded for patience with his transformation plan which was to last seven years. In December 2021, her successor, Rania Llewellyn, did not wear white gloves to describe her predecessors who would have poorly executed the promised technological transformation, according to her.
Under Ms. Llewellyn, Laurentian still did better. The bank acquired a long-awaited mobile application and managed to achieve certain key indicators of its strategic plan. The economic slowdown, an aborted attempt to put itself up for sale and a major IT breakdown, however, got the better of the manager, who was replaced at short notice by Mr. Provost in October.
When asked what he said to shareholders who wonder if the new plan will succeed this time, the executive offers an answer that evokes the memory of the one Ms. Llewellyn had given two years earlier. “We always come back to a question of execution,” replies Mr. Provost. […] We need to talk less about it and then execute. »
This week’s layoffs would be a demonstration of his willingness to take action.
Not just a matter of breakdown
Laurentian Bank revealed results below analysts’ expectations earlier Thursday, following the computer outage that disrupted its activities in September. The outage had financial consequences in the fourth quarter ended October 31, but it did not lead to an exodus of customers, underlines Mr. Provost, who repeats that such an event was “unacceptable”. The bank recorded a charge of $5.3 million due to the outage, of which $2.2 million relates to the cancellation of bank charges in September and October.
The size of personal deposits fell by $50 million in three months, but this variation is modest on a base of more than $22.3 billion. “(It’s) nothing abnormal compared to managing billions and billions of cash. This gives a strong sign that our customers are still loyal to the bank. »
In relation to the breakdown, analyst Meny Grauman, from Scotiabank, believes that Laurentian managed to save the furniture. “In fact, I would even say that the impact of the outage on the balance sheet was less than some feared. »
The disappointing results, notably the reduction in interest margins, demonstrate that the institution’s difficulties “are not limited to this single event”, according to the analyst.
Net profit fell 45% to $30.6 million. Adjusted diluted earnings per share is $1. Revenues, for their part, decreased by 4% to $247.4 million. Before the results were released, analysts expected adjusted diluted earnings per share of $1.16 and revenue of $262 million, according to financial data firm Refinitiv.