After 178 years, large commercial real estate lender Laurentian Bank of Canada will cease operating as its own bank as the Canadian institution that generations have relied on for banking services is sold in two separate transactions that are expected to reshape its future.
Laurentian said Fairstone Bank of Canada will acquire all its shares for $1.9 billion and integrate its commercial lending operations with Laurentian’s existing business. In a separate transaction, National Bank of Canada will purchase Laurentian’s retail and small business banking portfolios, along with its syndicated loan portfolio.
These moves will dismantle Laurentian’s full-service banking model and mark the end of its long-standing role as a standalone institution. The bank will keep its brand name under Fairstone’s ownership but will focus exclusively on specialty commercial banking.
“This transaction represents a new chapter for Laurentian Bank,” said Laurentian President and CEO Éric Provost said in a statement. “Our commercial banking expertise will be strengthened under Fairstone’s platform.”
Laurentian Bank began in Montreal in 1846 as the Montreal City and District Savings Bank. It was created by Bishop Ignace Bourget and local leaders to give working-class families, especially French-speaking Catholics, a safe place to save money in a market dominated by banks serving merchants and the wealthy. For generations, Laurentian stood as a Quebec institution, deeply woven into the province’s economic and cultural fabric.
This deal marks the culmination of years of challenges. Laurentian launched a formal strategic review in July 2023 to explore options, including a sale.
But it failed to find a buyer at that time. The bank then pursued a turnaround plan focused on commercial banking. Analysts had speculated that Laurentian might eventually have to sell after its underperformance compared to larger Canadian banks.
Significant commercial real estate lender
Laurentian has been a significant commercial real estate lender, offering financing for construction, term loans, and Canada Mortgage and Housing Corp.-insured mortgages. Laurentian's retail mortgage portfolio, valued at approximately $3.3 billion, and its $7.6 billion in deposits will be transferred to National Bank, according to Laurentian.
Laurentian’s commercial loan book was about $17.2 billion in 2024, but it faced pressure from credit migration in commercial real estate and inventory financing portfolios. Gross impaired loans rose by $41.9 million in 2025, and non-performing assets reached 1.33%, the highest among Canadian banks.
The bank leases offices across Canada but has been reducing its footprint. Laurentian has repeatedly slashed its office occupancy, including a $49-million cost savings initiative by halving its office footprint in 2021. The space reductions were reported in CoStar News and more office space cut backs in 2024 saw the bank reduce its Toronto-area office space by two-thirds.
Laurentian’s remaining office footprint is concentrated in Quebec, with a limited presence elsewhere. It operated 57 branches in Quebec before closing them as part of the restructuring. Laurentian also had the highest loan-to-deposit ratio among Canada’s top 20 banks at 149%, compared to 65% to 79% for the Big Six, according to its filings.
If the required regulatory and shareholder approvals are obtained, the transactions are expected to close by late 2026.