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Laurentian Bank emphasizes mortgage issue is immaterial to operations

Laurentian Bank of Canada, following its Dec. 5 report that C$180 million in mortgages were inadvertently sold, has clarified that the repurchase of the loans would not be material to its business, capital, operations or funding.

Montreal-based Laurentian had discovered issues with some of its mortgages, including client misrepresentation, documentation errors and a failure in the system to flag the loans as ineligible for portfolio insurance or for securitization.

The bank said it is working on tighter underwriting and quality control, but that the mortgages do not represent a credit issue and that no employees were implicated in any misrepresentation.

Laurentian's stock price closed at C$56.00 on Dec. 5, from the previous day's C$60.80. On Dec. 6, it slid to C$55.27 at closing, before recovering to C$57.42 at the end of the week.