(Bloomberg) -- Laurentian Bank of Canada said it missed all of its financial goals for 2023 and will take a restructuring charge to reduce costs, underscoring the huge turnaround job ahead for new Chief Executive Officer Eric Provost.
The bank’s profits were hit by the costs of a major technical outage in September, which made a number of services unavailable to customers, and the expenses associated with a strategic review. The Montreal-based bank looked for a buyer for some or all of its businesses, but couldn’t find attractive bids and decided to stay independent.
In the midst of the outage, the board pushed out Chief Executive Officer Rania Llewellyn and replaced her with Provost, and the chairman resigned.
Laurentian set out a strategic plan two years ago under Llewellyn that set ambitious targets for earnings growth, expenses, operating leverage and return on equity. It missed on all four in 2023, and the bank said it will re-examine those goals next year as its revamps its strategy.
Read More: CEO’s Sudden Departure Exposes Laurentian Bank Turmoil
The lender reported adjusted profit of C$1 a share for the quarter ended Oct. 31, well short of the C$1.16 average estimate of analysts in a Bloomberg survey. But provisions for credit losses were slightly less than expected, at C$16.7 million ($12.3 million).
Shares of Laurentian were down 0.5% at 10:19 a.m. in Toronto, extending their year-to-date decline to almost 19%.
“One thing is certain, the status quo at Laurentian Bank is no longer an option,” Provost told analysts on a conference call. “We will seize this opportunity to continue our simplification efforts in order to improve our customer experience.”
The cost of the outage was 9 Canadian cents a share on a pretax basis, Laurentian said in a statement. In total, non-interest expenses jumped about 13% in the fourth quarter, largely due to costs for restructuring and conducting the strategic review.
The streamlining of the bank will result in an additional C$6.5 million pretax charge in the current quarter, the bank said, and should result in C$8 million in annual savings before income taxes.
(Updates with share price, CEO’s quote. A previous version of this story corrected timing of strategic plan in fourth paragraph.)
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