Loss of customers, sagging deposits, increased employee turnover and technological backwardness: the Laurentian Bank will have to carefully execute its new strategy if it wants to correct the situation, recognized Rania Llewellyn, its president and CEO, who presented its plan to investors on Friday.
Hired in October 2020 to give new impetus to the declining Montreal bank, Mme Llewellyn did not put on white gloves to describe the seven-year transformation plan adopted by his predecessor, François Desjardins, in 2015. “What do I mean by strategy without execution? she said during the videoconference which lasted two hours. I mean adopting a cashless branch office model without having the technological infrastructure to support that kind of change. For example, not having a mobile app. “
The bank’s technological delays are a source of irritants for customers, deplores the leader. She gave an example of the time it takes to activate a credit card, which can take up to 25 days, or manually activate bank accounts, which takes two to three days.
Mme Llewellyn has promised to simplify and speed up the delivery of various banking services for individuals. Laurentian also launched its mobile banking application the same day. Mme Llewellyn no longer wants Laurentian’s size to be seen as a drag, but as an opportunity to be “more agile”. It relies on external partnerships to develop certain technological projects. Thanks to this kind of partnership, the mobile app, which was just launched, was built in seven months, while this kind of project usually takes longer, she said. “We are having discussions with key partners in different areas, but we have nothing to announce at the moment. “
In fiscal 2021, the personal loan portfolio declined by 5%. The objective is to stabilize it in 2022 and return to growth “at the bottom of the range to one decimal” in the medium term. Head of Personal Banking, Karine Abgrall-Teslyk, mentioned that half of customers only have one banking product with Laurentian and that she sees cross-selling opportunities.
In the business services segment, which is showing better performance, Laurentian wants to increase its presence in the United States, where it wants to increase the share of its loan portfolio from 14% to 18% by 2024. The principles ESG will also be an integral part of Laurentian’s strategy, whether to seize new business opportunities in business services and capital markets, or to increase its attractiveness to millennial professionals.
With its strategic plan, Laurentian wants to generate growth in adjusted earnings per share of more than 5% in fiscal 2022. It hopes to achieve a rate of 7% to 10% in the medium term. The same day, Laurentian Bank presented its fourth quarter results. It also announced a 10% increase in its dividend and its intention to buy back 2% of its outstanding shares for cancellation.
Results for the fourth quarter ended October 31 were marked by the release of a net loss of 102.9 million, or $ 2.39 per diluted share, compared to net income of 36.8 million, or 0, $ 79 per diluted share. The financial institution had already warned investors, on November 23, that the results of the fourth quarter would include an impairment charge and restructuring of 189.4 million relating to decisions related to its strategic plan.