By Robb M. Stewart
Laurentian Bank of Canada’s shares were under pressure Monday after the lender’s chief executive and its chair left in the wake of a network outage last week that disrupted online banking services.
In morning trading, the shares were 3.9% lower at C$29.10, widening the fall so far this year to 9.9%.
Laurentian said Rania Llewellyn left her positions as president and CEO and has been succeeded by Eric Provost, who was head of the Canadian bank’s personal and commercial banking operations. Llewellyn took the helm in 2020, becoming the first woman to lead a major Canadian chartered bank.
Board director Michael Boychuk was named chair with the resignation of Michael Mueller, the bank said.
Provost said his immediate priority in the new role would be to rebuild the trust of customers and address the impacts of a mainframe outage that occurred during a planned information-technology maintenance update.
Laurentian said Provost will implement a three-part plan to fully resolve any outstanding issues related to the outage as soon as possible, enhance communications with customers to provide timely updates on the full restoration of the bank’s services, and launch a comprehensive review of the factors that led to the outage.
Provost said Laurentian had restored most services, including its online banking platform, but due to higher-than-usual volumes customers might experience slowness or intermittent service interruptions when using the online platform. Some functions were still in the process of being restored on Monday. The bank said that data and financial information of customers remained secure through the roughly week-long outage.
In a letter to customers, the newly-appointed CEO said the bank would reverse all monthly service fees for September as soon as possible and, despite it being a federal holiday on Monday, a number of bank branches would be open. The bank also plans to extend branch hours for the remainder of the week.
The departure of the bank’s CEO and chair comes after Laurentian last month concluded a review of options, including a possible sale of the company or certain businesses, with a decision to accelerate its current plans, with an increased focus on efficiency and simplification.
Keefe, Bruyette & Woods in a research report said the top-level departure add even more uncertainty around Laurentian’s strategic direction.
“We expect investors will stay on the sidelines and await further clarity on the bank’s strategic direction,” KBW analyst Mike Rizvanovic said.
Write to Robb M. Stewart at [email protected]
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