The Laurentian Bank is for sale. As soon as the announcement was made, the Quebec bank’s stock exploded on the stock market: after closing at $33.53 the previous day, the price reached $48.23 yesterday morning before falling to around $43 in the afternoon. dollar fell back.
The $2 Billion Question: Who Will Take Over the Smallest of Canada’s Eight Banks? Ideally, it should be a Quebec financial group.
Since Laurentian Bank is headquartered in Quebec, I assume François Legault’s government will do whatever it takes to keep it owned by Quebec Inc.
It is evident that François Legault and his two financial monks, Eric Girard and Pierre Fitzgibbon, are already working hard to prevent Laurentian Bank from falling into the hands of a financial group outside of Quebec or any other Canadian bank.
Except, of course, for the National Bank or the Mouvement Desjardins, if ever either of our two major banking institutions in Quebec shows an interest in Laurentian Bank. The same goes for iA Financial Group or Power Corporation, two well-stocked Quebec financial groups.
But just between us, if the CAQ government really wants Laurentian Bank’s headquarters to stay here, they have the means to do so, if only with “our” Caisse de depot etplacement du Québec.
And if we add to the pool of potential buyers Investissement Québec, Fonds de solidarité FTQ, Fondaction de la CSN, to name a few, as financial partners, we agree that we have the financial means to take control of the Laurentian to take over the bank.
It would be all the more embarrassing to lose Laurentian Bank to a buyer outside of Quebec when we know that the bank’s main shareholder is Caisse de dépôt et Placement, with its block of 8% of the outstanding shares.
And since François Legault’s government also boasted about creating a multi-billion dollar envelope to protect our headquarters from foreign takeovers, it would look crazy not to use that envelope when needed.
IN THE CANADIAN BANKING WORLD
With a market value of almost 1.9 billion US dollars, Laurentian Bank is really small. It is equivalent to just 1% of the Royal Bank and just 5% of the National Bank in terms of market value, but is said to be the “smallest” of Canada’s big six banks.
Here are the other numbers (year 2022) to consider when assessing the “maximum” price to pay to take control of the bank.
- Total sales: $1 billion
- Net Income: $227 million
- Return on equity: 8.9%
- Total Net Worth: $50.7 billion
- Assets under management: $27.7 billion
- Loan portfolio: 51% personal loans; 49% commercial
- Number of branches: 57
- Number of employees: almost 3000
WHO WANTS TO BUY LA LAURENTIENNE?
Which of Canada’s Big Six banks could seriously covet Laurentian Bank?
It’s unclear which of the big six banks might be interested, according to analysts at Desjardins Securities.
“The Royal Bank is concerned about the acquisition of HSBC Canada, Toronto Dominion has already solidified its Canadian franchise, Bank of Montreal is integrating Bank of the West and National Bank is not prioritizing mergers and acquisitions in its strategy. Capital investment.” That leaves Scotiabank and CIBC, but we don’t know why either might be interested. Interestingly, earlier this year these two banks made a bid for the bankrupt American bank Silicon Valley Bank.
On the other hand, analysts at Desjardins believe the acquisition of Laurentian Bank could be “accelerating” for most of Canada’s Big Six banks as the transaction would allow them to grow their earnings per share.
While Laurentian Bank may well be “Quebecois” as headquartered, it is surprising, to say the least, that it is nonetheless run by a large majority of Ontario directors and officers.
To follow with interest!
