Laurentian Bank needs to solidify a message quickly: Portfolio manager
Following the latest news of a shakeup of Laurentian Bank’s C-suite, one portfolio manager said the bank needs to take steps to reassure its investors in short order.
On Monday, the bank announced Eric Provost, Laurentian’s group head of personal and commercial banking, would take over as president and CEO from Rania Llewellyn effective immediately, following an IT outage last week.
The bank also announced that director Michael Boychuk would replace Michael Mueller as chair of its board of directors.
Bryden Teich, partner and portfolio manager at Avenue Investment Management, said the IT issue reasoning could be a way for the bank to avoid indicating the leadership change was due to its failed strategic review from earlier this year.
“If I’m trying to read the tea leaves, the banking sector as a whole is in a difficult moment, I think Laurentian specifically has been searching for an identity,” he told BNN Bloomberg Monday. “I would say perhaps that management didn’t find it and this is just a board shakeup and the bank is headed in a different direction.”
When it comes to the most recent shakeup, Teich the bank needs to be open with its investors about where the bank is going.
“You have to come out with a message quickly,” he said. “I think a lot of the moves, trying to go private or sell themselves, I think it’s also a great way to shake out any shorts that were in your stock.”
WHAT’S NEXT FOR LAURENTIAN?
In the near term, Teich suggested Laurentian might keep its operations as-is for the time being, with an economic downturn looming,
“Ultimately, lending’s a tough business, we’re about to go through probably a tough credit cycle and you need to have a management team that can focus on getting the institution through that,” he said.
“What Laurentian becomes after that, I’m not sure.”
With files from The Canadian Press