Laurentian Bank slides on analyst downgrade over credit risks
BNN Bloomberg
Laurentian Bank of Canada’s mounting troubles have put its credit rating at risk, according to the latest analyst to downgrade the Montreal-based lender.
A series of snowballing setbacks prompted National Bank of Canada analyst Gabriel Dechaine to cut his rating to underperform from sector perform. It’s his second downgrade in just over a month, he last lowered his rating on the bank in September following Laurentian’s strategic review that ended without finding a buyer. Since then new challenges have emerged, including a service outage and the departure of key leaders.
“LB’s wholesale funding costs are rising in the wake of potential rating agency actions,” Dechaine said, citing a S&P Global Ratings downgrade to Laurentian Bank’s outlook to negative from stable on Thursday. DBRS Morningstar is undertaking a similar review, Dechaine expects an update in November.
Laurentian Bank has strong capital and liquidity levels, a spokesperson for the lender said in an email. The stock dropped 3.6 per cent Tuesday, and was the worst performer on the S&P/TSX Composite Index.
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