Laurentian Bank CEO outlines restructuring program

• aligning its information technology systems “with the product packaging requirements of the market and of our distribution partners”;
• launching B2B Trust, the former Sun Life Trust;
• restructuring retail banking;
• developing a series of partnerships for commercial banking; and
• restructuring Laurentian Bank into a bank holding company.

Rousseau expects that in 2001 Laurentian will be able to take advantage of the government’s proposal to allow bank holding companies, and will propose it at the bank’s next annual meeting in April. He says that retail and commercial banking services would be set up as separate companies.

B2B Trust already exists as a separate entity. Its brokerage and fund management businesses would be held by a firm called Group Financial Services. This change, “would allow Laurentian Bank management to operate each unit as a pure play in its respective sector and to seek partners for each selected niche player,” says Rousseau.

B2B Trust’s mission is to be an Internet wholesaler of generic products and services intended to be marketed under distributors’ brand names. Rousseau says that B2B’s technical sophistication and small market share allow it to offer services through retail competitors without cannibalizing Laurentian’s own market share. “Through its Internet portal, the business line will be able to execute a multi-channel distribution strategy resulting in a net increase of its market reach and in additional volumes. Its target market includes financial institutions, other Internet portals, communication companies and large retailers among others.”

Rousseau cites the bank’s Wealth Manager as an example of Laurentian’s new direction. Wealth Manager is a services package that establishes a bridge between basic retail banking services such as transaction accounts, credit services and Visa cards with a full range of mutual funds, GICs and other investments. The product is about to be offered to the bank’s retail clients and to B2B Trust’s distribution partners, including Sun Life and Merrill Lynch. In 2001 Laurentian will launch Asset Manager, which adds equity trading capabilites to Wealth Manager.

The restructuring of retail banking operations is focused on achieving economies of scale, integrating the acquisition of 43 Scotiabank branches, and building revenue through better service to distribution channels notably B2B.

Commercial banking will focus on improving returns using less capital by enhancing its securitization programs and using credit derivatives to reduce risk. It will also seek more partnerships.
-IE Staff