Canada's Laurentian Bank shifts capital markets unit focus on fixed income, forex

By Arasu Kannagi Basil

(Reuters) -Laurentian Bank of Canada told its investors on Friday it would simplify its capital markets franchise to focus on its "strongest expertise", such as fixed income and foreign exchange, under its revamped strategic plan.

The plan, unveiled at its investor day, is part of the bank's intent to streamline its business after it concluded its previous strategic review in September without a sale.

Since then, Laurentian's shares have lost around a fourth of their value.

The bank at the investor day also said its commercial banking business would continue to remain its growth engine, helped by strong lending growth.

It would attempt to grow market share in personal banking by introducing low-cost products to attract new customers and increase deposits, the bank added.

The bank, earlier this month, took steps to pacify investors, including cutting jobs and shutting down its equity research unit as part of a restructuring.

SWINGS TO SECOND-QUARTER LOSS

The Montreal-based bank swung to a loss in the second quarter due to impairment and restructuring charges of C$196.8 million ($144.4 million).

The charges were related to the restructuring of the bank's operations and the impairment of its personal and commercial banking segment. Shares fell 5% in afternoon trading.

Analysts at Cormark Securities said the big restructuring charge highlights the sheer magnitude of changes required at Laurentian.

The bank also booked severance charges of C$2.9 million in the second quarter and expects to record additional charges of nearly C$7 million in the third quarter.

Laurentian Bank posted a net loss of C$117.5 million, or C$2.71 per share, in the three months ended April 30, compared with a profit of C$49.3 million, or C$1.11 per share, a year earlier.

($1 = 1.3629 Canadian dollars)

(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Vijay Kishore)