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Noah Zivitz

Managing Editor, BNN Bloomberg

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Laurentian Bank of Canada has joined the parade of lenders rewarding their shareholders after getting the all-clear from Canada's banking regulator.

Montreal-based Laurentian said Friday morning it received approval to repurchase up to 875,000 of its common shares, which represents two per cent of shares outstanding. The bank also said its board approved a 10 per cent dividend hike, taking the quarterly payment to $0.44 per share from $0.40. That move takes effect with the payment scheduled for Feb. 1.  

Canada's banks delivered a flurry of dividend hikes and share buybacks in recent weeks after the Office of the Superintendent of Financial Institutions ended its pandemic-era ban on those activities on Nov. 4. 

Laurentian also mapped out a new strategic plan on Friday to frame the bank’s future under the leadership of Rania Llewellyn, who was appointed chief executive last year.

Her vision for the bank includes an emphasis on Environment, Social, and Governance (ESG) that will see Laurentian halt direct financing for oil and gas or coal exploration, production and development. In a release, Laurentian said this will help it differentiate itself from other banks and also woo businesses striving for a green transition.

The strategic plan also includes a goal of boosting U.S. exposure in Laurentian’s commercial loan book to 18 per cent from 14 per cent. The bank also said it will adopt a “digital-first” approach in its personal banking operations.

“With the launch of our new purpose and core values, we believe we have the right plan and the right team in place to achieve long-term, sustainable growth. At Laurentian Bank, we believe we can change banking for the better by seeing beyond numbers,” Llewellyn said in a release.

In addition to the strategic plan, Laurentian said on Friday it swung to a net loss of $102.9 million in its fiscal fourth quarter, compared to a profit of $36.8 million a year earlier. 

The loss was due to $189.4 million in charges that Laurentian booked in the quarter, the vast majority of which were disclosed in late November as part of a strategic review. The most substantial charge was a $93-million impairment of Laurentian’s core personal banking division, which was blamed in part on the bank's "limited digital capabilities." 

On an adjusted basis, Laurentian earned $1.06 per share in the quarter that ended Oct. 31. Analysts, on average, anticipated $0.92 in per-share profit.

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