Canadian bank news dominated headlines after Laurentian Bank agreed to be acquired in a two-part transaction involving Fairstone and National Bank, while Scotiabank reported stronger results in capital markets and wealth management. The deal marks the end of Laurentian’s presence on the public markets as its branches in Quebec are set to be closed.
BNN Bloomberg spoke with Lorne Steinberg, president of Lorne Steinberg Wealth Management, who said Scotiabank’s strategic overhaul is gaining traction and could help narrow its valuation gap with peers. He also noted that stable employment, moderating GDP growth and declining bankruptcies have supported bank fundamentals heading into Q4 earnings.
Key Takeaways
- Laurentian Bank’s sale to Fairstone and National Bank ends its public listing and will result in all Quebec branches being closed.
- Scotiabank’s strategic refocus on domestic and wealth operations is showing progress after a decade of underperformance.
- Canadian banks enter Q4 with stable employment, moderating GDP growth and slightly lower bankruptcy rates supporting fundamentals.
- AI is driving efficiency across banks but heavy tech-sector capital spending poses valuation risks into 2026.
- Investors may find value in overlooked global consumer giants such as Nestlé and Unilever as tech leadership moderates.
Read the full transcript below:
ANDREW: Lots of news in banking today, including the acquisition of Laurentian Bank by Fairstone and National Bank. We’re joined by Lorne Steinberg, president of Lorne Steinberg Wealth Management. Great to see you.
LORNE: Great to be here, Andy.
ANDREW: So finally, Laurentian Bank — it’s been a long, painful story for investors. Maybe you can put up a five-year chart, but it is coming off the public markets.
LORNE: And finally. I mean, Laurentian has never been able to compete with the other Canadian banks, never been able to get their technology act together, and they don’t have the capital. This is a great deal for shareholders. And even though there will be layoffs — the case today, the government in Quebec is in favour of the deal — I think it will be better for their customers as National Bank takes over the loan book and deposit book. And it’s turning a chapter. No more Laurentian Bank branches in the province of Quebec.
ANDREW: The shareholders in Laurentian Bank get something — they get $40.50.
LORNE: Absolutely. I think it’s at least a fair deal for shareholders, and they can redeploy their capital elsewhere. And the deal looks like it makes a lot of sense for everybody.
ANDREW: But it looks, from my reading of it, like Laurentian’s branch employees and branches will all be gone. National Bank is just shutting all that down.
LORNE: Exactly. They’re simply buying the deposits and the loans. National Bank. Fairstone is going to buy the commercial operations. And it’s a sad day for the employees.
ANDREW: Yeah, there’s some vague assurance that they’ll be eligible for jobs at National Bank. Talk to us about Bank of Nova Scotia. It looks like they are delivering under their relatively new CEO. He’s been there about, I think, two years.
LORNE: Almost three years — almost three years in February. And he took over, they embarked on a strategic plan de-emphasizing Latin America and redeploying capital, Andy, really more domestically: U.S., wealth management and the like. Coming off a rather brutally bad 10-year period for the stock and for shareholders, let me say the strategic plan seems to be working. It’s well underway. Significant improvement in wealth management, certainly in the capital-markets area, and ongoing in international as well to some degree. But the Canadian operations still have some work to do.
ANDREW: Yeah. Just looking at, broadly, provisions for credit losses — about $1.1 billion, slightly above what Raymond James was watching for. I guess provisions for credit losses are going to be a hot topic this reporting season.
LORNE: They are. And so far we’re not seeing — I don’t expect to see — any huge increase in the PCLs, I have to say. Canadians are still in decent shape. And interestingly enough, in the last quarter, so far, bankruptcies on the consumer side and business side have actually been a tick lower. But if this economy continues to moderate, for sure, that’ll be an issue.
ANDREW: Which banks do you own, Lorne?
LORNE: We own the Big Five, actually. The only one we don’t own is National Bank. We own them in different weightings. Bank of Nova Scotia we are most bullish on, only because the valuation — there is such a wide valuation gap between them and everybody else.
ANDREW: Sorry — National Bank you’re less bullish on?
LORNE: National Bank — less. Sorry. But Bank of Nova Scotia we are most bullish on because of the valuation gap, lower price-earnings ratio, lower price-to-book. But really, with this big improvement, we expect Bank of Nova Scotia, over the next couple of years, to outperform in terms of earnings-per-share growth relative to the rest of the sector.
ANDREW: Maybe we could put up a five-year chart for Bank of Nova Scotia, or even a 10-year chart, because I’m not clear, actually, whether they’re back into record territory yet. Some of the banks, as you know, have been doing that. It looks as though they are near a record anyway.
LORNE: Sure, but they’ve underperformed the rest of the sector in a significant way. Listen, I have to say it was a bit of a surprise — this new CEO came from outside the banking sector. But maybe they needed a fresh pair of eyes to really focus this business, and I think they’re doing a very fine job.
ANDREW: What is your feeling on the worry that AI is something of a circular bubble — that Nvidia gets big contracts and then uses that money to invest in its customers?
LORNE: Sure. So the positive side of AI — AI is real. All of the Canadian banks are laying people off in large part because of AI. The issue is all of the so-called AI tech and communications companies — Nvidia, Alphabet, etc. — they are plowing so much money into capital expenditures in the next couple of years, hundreds of billions of dollars. There’s a question: will they get a return on all of that money, or is this becoming a game where everybody’s trying to outspend the other player? And one of the risks we see in markets going forward — in 2026, if these companies’ earnings deteriorate somewhat, there could be quite a long way to fall for some of those companies.
ANDREW: A couple of stocks on your radar here — Nestlé and Unilever, global consumer-products giants.
LORNE: Sure. This is one of the many ignored sectors. And Nestlé — if you’re buying it, you’re getting it close to a 10-year low. Again, new management. We’re looking for earnings to rebound over the next few years close to the double-digit level. Coffee is their biggest business. Pet food is their next biggest. They distribute all Starbucks coffee that is not sold in a Starbucks. And so this is a company that is extremely cheap, the biggest food company in the world, poised for some good earnings growth. Unilever is a little bit more advanced in their turnaround. They’re experiencing better earnings growth. But again, both of these companies have a massive global footprint — somewhat ignored by investors, with everybody flowing money into tech — and so offering decent prospects. Those two offer decent prospects, also good dividends, healthy dividend growth going forward and best in the business.
ANDREW: Lorne, thank you very much.
LORNE: Andy, it’s great to be here.
ANDREW: Lorne Steinberg, president of Lorne Steinberg Wealth Management.
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This BNN Bloomberg summary and transcript of the Dec. 2, 2025 interview with Lorne Steinberg are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
