Laurentian Plunges After Rare Dividend Cut for Canadian Bank

Montreal-based lender chops payout 40% amid ‘uncertain’ times
Reduction will ‘provide greater financial strength,’ bank says

Commercial and residential buildings stand at dusk in the city skyline of Montreal, Quebec, Canada, on Saturday, Aug. 18, 2018. Median single-family home prices in Montreal rose 5.7% to C$336,250 in July from a year ago, according to the Greater Montreal Real Estate Board (GMREB).Photographer: Brent Lewin/Bloomberg

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By Doug Alexander

May 29, 2020 at 12:36 PM UTC

Updated on

May 29, 2020 at 1:57 PM UTC

This article is for subscribers only.

Laurentian Bank of Canada shares plunged as much as 20% after the company slashed its quarterly dividend in the first payout cut by a large Canadian lender in almost three decades.

The Montreal-based regional bank chopped its dividend by 27 Canadian cents to 40 cents, a 40% reduction. The move came as Laurentian posted fiscal second-quarter results Friday that missed analysts’ estimates, the result of higher provisions for loan losses to brace for the financial impacts of the coronavirus pandemic.