Laurentian Bank to sell operations to Fairstone Bank, National Bank of Canada

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Laurentian Bank of Canada has signed agreements to split and sell its commercial operations to Fairstone Bank and the retail and small medium enterprise (SME) banking portfolio to National Bank of Canada.

In 2023, Laurentian Bank announced a review of its strategic options, including a possible sale, which ended without finding a buyer.

Under the agreement, Fairstone will pay C$40.50 (0.29) per share in cash, a 20% premium over Laurentian’s closing share price of $33.76 as of 1 December 2025. This translates the deal value to C$1.9bn ($1.4bn).

The transaction with Fairstone is expected to close by late 2026, subject to receipt of regulatory and shareholder approvals, and other customary closing conditions.

Fairstone Bank expects the acquisition to increase its scale in commercial real estate and expand its business lines in inventory and equipment financing.

As per the terms, the Laurentian brand will be retained and be a part of Fairstone with the head office of the commercial segment to remain in Montreal, and chief executive Éric Provost to continue in his role.

Fairstone Bank president and CEO Scott Wood said: “We view Québec as a key market and are excited to continue building our presence with the expertise we’re acquiring from Laurentian Bank.

“This transaction strengthens Fairstone Bank’s competitive position, diversifies revenue streams, and deepens our national lending footprint. It’s a disciplined step forward that is very much aligned with our value creation plan.”

Before completion of the deal with Fairstone, the National Bank of Canada will acquire all Retail/SME assets and liabilities of Laurentian Bank.

The amount that National Bank will pay will be as per the outstanding balances at closing.

As at 31 July, Laurentian Bank had retail loans and deposits worth C$3.3bn and C$7.6bn, respectively, while the SME loans and deposits totalled C$0.8bn and $0.6bn, respectively.

Separately, at the same time as the execution of the Retail/SME agreement, Laurentian Bank and National Bank have also entered into a definitive loan purchase agreement related to the syndicated loan transaction.

As at 31 July 31, the syndicated loans totalled approximately $0.9bn. The closing of the syndicated loan transaction is independent of the completion of both the Retail/SME transaction and the Fairstone deal.

The syndicated loan transaction is expected to close in approximately three months, subject to customary closing conditions.

National Bank will also take over the distribution for certain mutual funds, with underlying funds totalling C$3.4bn.

Laurentian Bank will close its branches in Québec and manage staff changes before the transfer of its retail and SME business.

The Canadian bank will not move any staff or retail branches to National Bank but will terminate or reassign them to other business lines or to Fairstone Bank.

National Bank president and CEO Laurent Ferreira said: “Leveraging our strong presence in Québec, this transaction aligns with our domestic growth strategy and is a natural fit.

“We look forward to welcoming Laurentian Bank’s retail, SME, and syndicated loan clients, who will soon benefit from National Bank’s leading digital services, an expanded range of financial products, and access to our extensive branch network and business banking teams.”

A special committee of Laurentian’s board, formed to oversee the process, has unanimously recommended the transactions to the board and shareholders.

La Caisse, which holds around 8% of Laurentian shares, has agreed to support the deal, subject to certain conditions.

Éric Provost said: “This announcement is aligned with the acceleration of Laurentian Bank’s commercial specialisations, as announced in our 2024 Strategic Plan.

“Joining forces with Fairstone Bank will allow us to grow our specialised commercial business even further, while maintaining our brand identity and head office in Montreal, where we were founded over 175 years ago.

“Partnering with National Bank will allow our customers to benefit from a broader range of services and improved, modern technology.”

JP Morgan is serving as lead financial advisor and Osler, Hoskin & Harcourt as legal counsel to Laurentian Bank, while Norton Rose Fulbright is advising on regulatory matters.

Blair Franklin is serving as an independent advisor to the special committee, and McCarthy Tétrault as legal advisor to National Bank.

National Bank Capital Markets is serving as financial advisor, while Torys and Stikeman is acting as legal advisors to Fairstone Bank.

"Laurentian Bank to sell operations to Fairstone Bank, National Bank of Canada" was originally created and published by Retail Banker International, a GlobalData owned brand.

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