Canada’s Laurentian Bank replaces CEO, chairman after IT outage

Oct 2 (Reuters) – Laurentian Bank (LB.TO) on Monday named insider Eric Provost as chief executive with immediate effect, following an IT outage that disrupted online services and just days after ending a strategic review without finding a buyer.

Provost replaces Rania Llewellyn, the first and only woman to head a Canadian bank, who took the role in 2020 and spearheaded a three-year strategic plan at the bank focused on modernization and improving efficiencies.

Laurentian said Provost’s immediate priority would be to address the impact of a mainframe outage that occurred last month during a planned IT maintenance update. Customer data and financial information were secure, the bank said.

Laurentian also announced the appointment of Michael Boychuk as chair of the board, replacing Michael Mueller.

Shares of the Montreal-based bank, Canada’s ninth largest, were down about 3.5% in early trading.

The bank had already shuffled its leadership team after failing to find a buyer during a strategic review.

Analysts said the surprise move added uncertainty around the bank’s strategic direction as shareholders await a more concrete plan.

“Laurentian has been undergoing a significant modernization of digital tools and the IT outage clearly appears to be a significant issue for customers to lead to such an abrupt management change- if indeed this was the only reason for these changes,” RBC analyst Darko Mihelic said.

Provost said the bank would develop a new plan “to ensure the sustained success” of the bank once the issues related to the outage are cleared.

Provost, who has been with the bank for over a decade, took on an expanded position as group head of personal and commercial banking last month after the bank dropped its M&A plan.

Laurentian had launched the review in July, but later that month, a media report citing sources said it was struggling to find an acquirer and that Canada’s top banks – Bank of Nova Scotia (BNS.TO) and Toronto-Dominion Bank (TD.TO) – had backed out of a potential acquisition.

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