Laurentian Bank appoints new CEO after computer mainframe outage

Laurentian Bank announced the appointment of Éric Provost as president and chief executive on Monday, following a computer outage at the bank last week.

Provost replaces Rania Llewellyn in the top job, effective immediately. He was most recently Laurentian's group head of personal and commercial banking.

The bank also said director Michael Boychuk has been appointed chair of its board of directors, replacing Michael Mueller, who has resigned from the board.

"We have experienced challenges recently and the board is confident that Éric will successfully focus the organization on our customer experience and operational effectiveness," Boychuk said in a statement.

"Éric's appointment as CEO follows his exceptional performance leading our commercial banking business and was part of our formal succession planning process." 

Laurentian said it suffered a mainframe outage last week during a planned IT maintenance update. It said customer data and financial information remained secure at all times.

The bank said Provost's immediate priority will be to rebuild trust with the bank's customers and address the impacts of the outage.

"Once the issues related to the outage are fully behind us, we will develop a new plan to ensure the sustained success of our bank," Provost said. 

"We will focus our efforts on renewing the trust of loyal customers while continuing our efforts to drive greater operational efficiency and growth in all our business lines."

As an initial step, the bank said it will reverse all monthly service fees for September as soon as possible. 

Last month, Laurentian completed its review of strategic options without a deal to sell the bank.

A strategic review is often seen by investors as a prelude to a sale by a company. However, Laurentian said it will work on simplifying its organizational structure and focusing on allocating capital and resources to its highest grossing businesses and specialized products.

Laurentian said it would share more information when it reports its fourth-quarter results on Dec. 7 and will unveil a renewed strategic plan at an investor day early in 2024.

The bank has been working through a three-year strategic plan it launched in late 2021 to modernize operations, including with the rollout of its first mobile banking app. 

This report by The Canadian Press was first published Oct. 2, 2023.

Laurentian needs to send a message to investors quickly, expert suggests

Ben Cousins, BNN Bloomberg

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.”

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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