MONTREAL, Nov. 23, 2021 (GLOBE NEWSWIRE) — Laurentian Bank of Canada (TSX: LB) (the �Bank) today announced that it expects to record certain charges in its fourth quarter and fiscal 2021 results in relation to its strategic review. The Bank also announced that it will hold a virtual Investor Day on December 10, 2021, to unveil its new strategic plan, under the leadership of its new President & CEO and management team.
As a result of its strategic review, the Bank expects to record certain charges to its fiscal 2021 fourth quarter earnings, estimated to reduce reported earnings by $209 million pre-tax, or $163 million after tax, and adjusted earnings1 by $19 million pre-tax, or $14 million after tax. Reported diluted earnings per share are expected to be impacted by approximately $3.73 and adjusted diluted earnings per share2 by $0.33. The expected charges would also impact the Bank’s Common Equity Tier 1 capital ratio3 by approximately 25 basis points which is expected to remain above 10%.
The expected charges are divided into four categories: Personal Banking Segment Impairment, Future of Work, Technology and Credit Provisions. Unless otherwise indicated, all amounts noted below are on a pre-tax basis and may not add due to rounding.
Personal Banking Segment Impairment
Future of Work
Technology
Credit Provisions
Ongoing cost reductions
The expected impact on expenses on a pre-tax basis, stemming from these decisions is estimated to generate approximately $4 million of cost reductions for the fourth quarter of 2021 and $20 million of ongoing cost reductions starting in 2022. These are mainly as a result of lower amortization charges and lower rent expenses.
These difficult but necessary changes make us more confident than ever about our future, said Rania Llewellyn, President & Chief Executive Officer. As an organization we have never been more unified, with a renewed management team and employees that are focused on our customers. We continue to maintain a strong capital and liquidity position that support our strategic investments in the Banks future and reposition us for sustainable, long-term profitable growth.
Conference Call
A conference call to discuss these announcements will take place on November 23, 2021, at 9:00 a.m. ET and is expected to last approximately 30 minutes. Participating in the call will be: Rania Llewellyn, President and CEO and Yvan Deschamps, Executive Vice President and CFO. The live, listen-only, toll-free, call-in number is 1-800-289-0438, code 9878978. A live webcast and the presentation material referenced during the call will also be available on the Banks website, lbcfg.ca – Investor Centre, tab Presentations and events. The conference call playback will be available on a delayed basis from 12:00 p.m. ET on November 23, 2021 until December 23, 2021 at 12:00 p.m. ET.
Laurentian Bank will announce its fourth quarter and fiscal 2021 results on December 10 and will host an earnings conference call at 8 a.m. ET. This will be followed by a Virtual Investor Day at 10 a.m. ET. Please see the Banks website, lbcfg.ca – Investor Center, for more details.
Contact Information
Investor Relations
Susan Cohen
Director, Investor Relations
Mobile: 514 970-0564
susan.cohen@lbcfg.ca
Media
Merick Seguin
Senior Manager, Media Relations
Laurentian Bank of Canada
Mobile: 514 451-3201
merick.seguin@laurentianbank.ca
Caution Regarding Forward-Looking Statements
The Bank may, from time to time, make written or oral forward-looking statements within the meaning of applicable securities legislation, including in this document and in other documents filed with Canadian regulatory authorities or in other written or oral communications. Forward-looking statements include, but are not limited to, statements regarding business plans and strategies, priorities and financial objectives, accounting estimates and expected accounting and financial reporting effects and cost savings (including those for the fourth quarter and year ended October 31, 2021 and future periods) the regulatory environment in which the Bank operates, the anticipated impact of the coronavirus (COVID-19) pandemic on the Banks operations, earnings results and financial performance and statements under the headings Outlook, COVID-19 Pandemic and Risk Appetite and Risk Management Framework contained in the Bank’s 2020 Annual Report, including the Managements Discussion and Analysis for the fiscal year ended October 31, 2020 , as updated by the Banks most recent quarterly Managements Discussion and Analysis, and other statements that are not historical facts. Forward-looking statements typically are identified with words or phrases such as believe, assume, estimate, forecast, outlook, project, vision, expect, foresee, anticipate, plan, goal, aim, target, may, should, could, would, will, intend or the negative of these terms, variations thereof or similar terminology.
By their very nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties, both general and specific in nature. Material economic assumptions underlying the forward-looking statements contained in this document are set out in the 2020 Annual Report under the heading Outlook, as updated by the Banks most recent quarterly Managements Discussion and Analysis. There is significant risk that the predictions, forecasts, projections or conclusions will prove to be inaccurate, that the Bank’s assumptions may not be correct, and that actual results may differ materially from such predictions, forecasts, projections or conclusions.
The Bank cautions readers against placing undue reliance on forward-looking statements, as a number of factors, many of which are beyond its control and the effects of which can be difficult to predict, could influence, individually or collectively, the accuracy of the forward-looking statements and cause actual future results to differ significantly from the targets, expectations, estimates or intentions expressed in the forward-looking statements. These factors include, but are not limited to, risks relating to: the impacts of the COVID-19 pandemic on the Bank, its business, financial condition and prospects (including market, credit, funding and liquidity); technology, information systems and cybersecurity; technological disruption, competition and the Banks ability to execute on its strategic objectives; the economic climate in the U.S. and Canada; accounting policies, estimates and developments; legal and regulatory compliance; fraud and criminal activity; human capital; insurance; business continuity; business infrastructure; environmental and social risk and climate change; and its ability to manage operational, regulatory, legal, strategic, reputational and model risks, all of which are described in more detail in the section titled Risk Appetite and Risk Management Framework beginning on page 43 of the 2020 Annual Report, including the Managements Discussion and Analysis for the fiscal year ended October 31, 2020, as updated by the Banks most recent quarterly Managements Discussion and Analysis.
The Bank further cautions that the foregoing list of factors is not exhaustive. Additional risks and uncertainties not currently known to us or that the Bank currently deems to be immaterial may also have a material adverse effect on its financial position, financial performance, cash flows, business or reputation. Any forward-looking statements contained in this document represent the views of Management only as at the date hereof, are presented for the purposes of assisting investors and others in understanding certain key elements of the Banks current objectives, strategic priorities, expectations and plans, and in obtaining a better understanding of the Banks business and anticipated operating environment, and may not be appropriate for other purposes. The Bank does not undertake to update any forward-looking statements, whether oral or written, made by the Bank or on its behalf whether as a result of new information, future events or otherwise, except to the extent required under applicable securities regulation. Additional information relating to the Bank can be located on the SEDAR website at www.sedar.com.
About Laurentian Bank Financial Group
Founded in 1846, Laurentian Bank Financial Group is a diversified financial services provider whose mission is to help its customers improve their financial health. The Laurentian Bank of Canada and its entities are collectively referred to as Laurentian Bank Financial Group (the Group or the Bank).
With more than 2,800 employees guided by the values of proximity, simplicity and honesty, the Group provides a broad range of advice-based solutions and services to its personal, business and institutional customers. With pan-Canadian activities and a presence in the U.S., the Group is an important player in numerous market segments.
The Group has $44.9 billion in balance sheet assets and $31.2 billion in assets under administration.
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1 This is non-GAAP financial measure. Non-GAAP financial measures are not standardized financial measures under the financial reporting framework used to prepare the financial statements of the Bank and might not be comparable to similar financial measures disclosed by other issuers. See the Banks Managements Discussion and Analysis for the nine months ending July 31, 2021 for more information.
2 This is a non-GAAP ratio. Non-GAAP ratios are not standardized financial measures under the financial reporting framework used to prepare the financial statements of the Bank to which the non-GAAP ratios relate and might not be comparable to similar financial measures disclosed by other issuers. Adjusted measures used as a component of the non-GAAP ratios are non-GAAP financial measures.
3 Capital ratios are disclosed by the Bank in accordance with OSFI’s Capital Adequacy Requirements guideline.
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