Montreal-headquartered Laurentian Bank of Canada (LBC) recently announced its bold restructuring strategy. The Schedule 1 bank plans to cut 300 jobs and merge 50 branches over the next 18 months. The changes were announced on Wednesday last week at downtown Montreal’s Palais des Congrès by executives meeting with hundreds of their employees.
Francois Desjardins, president and chief executive officer of LBC, said that the traditional banking model was becoming obsolete. Consequentially, LBC needed to adapt its retail banking services to better compete with fintech rivals, as well as adjust to customer demands for more online and mobile banking services.
Desjardins further noted that LBC had to change its retail banking strategy to "optimize [its] operating efficiency, while meeting the changing demands of…customers." This required a stronger focus on financial advisors and account managers, as well as cutting down on the range of products on offer.
As of July 31, 2016, Laurentian Bank of Canada had 148 branches and 3,631 full-time employees.
In a further effort to cut costs, LBC announced in August that it would be merging all its corporate offices at a new location at E-Commerce Place (CCE) on René Levesque Blvd in Montreal.
According to Robert Sedran, equity research analyst at CIBC World Markets, LBC’s massive restructuring move was particularly bold. “Banking is not typically an industry that sees bold moves…and we see this as a bold move,” Sedran wrote in a note to clients. “There is no question that branches are being de-emphasized in the industry, but we did not think we were quite at the point at which tumbleweeds were blowing across the teller aisle.”
LBC’s changes to its retail banking strategy are likely to draw the attention of other banks, and rivals will be closely observing the bank’s performance in the coming quarters even if they don’t share many of the specific challenges facing LBC.
FinTech and the mortgage industry