By Mathieu Dion and Christine Dobby
(Bloomberg) — Laurentian Bank of Canada reached an agreement to sell itself to Fairstone Bank for $1.9 billion and will hive off its retail banking unit to focus on commercial lending.
Fairstone will pay $40.50 per share in cash, a 20% premium to Monday’s closing price. Prior to that deal closing, National Bank of Canada, the country’s sixth-largest lender, will acquire all of Laurentian’s retail and small-business assets and liabilities, according to a statement Tuesday.
National Bank’s shares hit a record high, trading at C$170.54 as of 10:41 a.m. in Toronto. Laurentian shares rose 18% to their highest level since August 2023, reaching C$39.92 as of the same time.
The deal would resolve longstanding questions about the future of Laurentian, which has struggled to keep up with larger rivals in banking technology. Two years ago the board went through a strategic review that ended without finding a buyer. That was followed by a major technology breakdown and the sudden departure of the chief executive officer.
Fairstone is an alternative mortgage lender that also offers a variety of other financial products. It’s closely held, but in January it announced that Smith Financial Corp., the vehicle of Canadian billionaire Stephen Smith, had taken a majority voting interest. Centerbridge Partners and Ontario Teachers’ Pension Plan Board are minority owners, Fairstone said at the time.
The deal will add “scale and accelerate growth in commercial real estate across the country, particularly in Quebec,” Fairstone said in Tuesday’s statement. The firm plans to move its headquarters to Montreal and the deal includes a guarantee to maintain Laurentian’s brand identity and commercial head office in the city.
Those commitments to the province won the transaction the backing of the Caisse de Depot et Placement du Quebec, which is the largest shareholder in Laurentian with about an 8% stake, according to data compiled by Bloomberg.
Éric Provost will continue as Laurentian’s CEO after the transaction is completed, which is expected late next year, subject to regulatory approvals. Fairstone will also acquire Laurentian Bank’s capital-markets operation.
Competitive Challenges
Laurentian has retail loans and deposits of $3.3 billion and $7.6 billion, respectively, while the small-business loans and deposits total $1.4 billion. The amounts are relatively modest, but “the deal should further enhance NA’s strong position in the Quebec market,” Bank of Nova Scotia analyst Mike Rizvanovic wrote in a client note.
The deal “highlights the challenges in competing within the Canadian lending market with a sub-scale franchise,” he wrote. The deal follows Royal Bank of Canada acquiring HSBC Holdings Plc’s Canadian assets in 2024 and National Bank buying Edmonton-based Canadian Western Bank earlier this year for $5 billion, giving it a bigger footprint in the western provinces of Alberta and British Columbia. That leaves EQB Inc. “as the lone publicly traded smaller bank in the market,” Rizvanovic said.
National Bank won’t assume any of Laurentian’s bank branches or employees, and all branches of Laurentian Bank located in Quebec will eventually be closed.
“National not only benefits by increasing its scale in its home province but does not have to deal with the legacy issues associated with Laurentian’s branch system,” Jefferies Financial Group Inc. analyst John Aiken said in a report, noting that Laurentian’s “elegant exit” is National’s gain. “Getting the assets, deposits and mutual funds at book value is simply icing on the cake.”
National Bank, which had revenue 13 times greater than Laurentian in fiscal year 2024, expects the deal to add 1.5% to 2% to adjusted earnings per share, which “appears reasonable, while benefiting return on equity in the first year after completion,” said Bloomberg Intelligence analyst Paul Gulberg.
–With assistance from Melissa Shin.
©2025 Bloomberg L.P.
Visited 647 times, 647 visit(s) today
Acquisition banks bloomberg canadian western bank Éric Provost fairstone bank laurentian Bank National Bank
Last modified: December 2, 2025