First female chartered bank CEO expands on bold plans for Laurentian

IN FIRST PERSON RANIA LLEWELLYN

Rania Llewellyn made history as the first woman to lead one of Canada’s chartered banks at perhaps the worst possible time. The president and CEO of Laurentian Bank of Canada found herself staring down the pandemic and a yearslong effort by the Quebec-based institution to modernize its processes.

Within a year, Llewellyn and her team had drafted a three-year strategic plan, began shoring up Laurentian’s lacklustre digital payment system and filled vacancies in its senior management.

It hassince prioritized remote working — cutting its real estate footprint in half — and launched its first ESG (Environmental, social, and corporate governance) report.

But more challenges lie ahead, not least of which is Canada’s current inflation-triggered roller-coaster.

Llewellyn spoke to the Star shortly after the Bank of Canada’s

interest rate adjustment in March about leaving Scotiabank for Laurentian, keeping older customers happy with Laurentian’s digital app and how to bring more women into the banking industry.

You started at Scotiabank as a part-time bank teller. Over a 26-year-career, you made it all the way to executive vice-president of global business payments. Given your long history with Scotiabank, what was it like to leave for Laurentian Bank?

It was a great opportunity that I couldn’t pass up. I felt like I had spent 26 years training for this role. I feel extremely fortunate for all of the experiences that I had. Just like leaving anything that you’ve been with for a long, long time, it was a difficult decision — but the opportunity just far outweighed any kind of potential feelings of loss. As I tell people, it’s really important to feel a little uncomfortable. That’s the only way you can professionally and personally grow.

What was so great about the opportunity, given that you were moving from a much larger institution?

In large institutions, all of your experiences are gradual in terms of the size of the opportunity. I had the opportunity of running many divisions at Scotiabank. One of them was actually a subsidiary called Roynat Capital, so I ran an end-to-end organization before. I knew exactly what I was getting into. A smaller organization is a lot more entrepreneurial. You can be a lot nimbler; you can be a lot more agile; you can make a bigger impact in a much shorter period of time.

In terms of what really attracted me to Laurentian — I’ve always been branded as a transformational leader. There was an opportunity for me to transform this bank. I also love building high-performing teams. There were a number of vacancies at the leadership level, so I was able to attract a very diverse group of leaders who are excited about transforming a business.

Tell me about that transformation. What did you think after your first month, when you started to take stock of the situation at Laurentian Bank?

I had done some due diligence, obviously, before joining, so I had seen the financial results of the organization. I knew going in, for example, that there was no mobile app at Laurentian Bank. I know that they were not necessarily as advanced as could be in terms of a customer experience, product offering and from a technology perspective.

I was thoroughly impressed by the talent that we have in the organization. The commercial book of business was extremely well run, and I would say is best-in-class in the specializations that we’re in. You look at the net promoter score and our customer base — it’s a welloiled machine. The integration of acquisitions and the leadership was extremely well-done there with a very solid risk management team as well.

Where I saw opportunities was in terms of our digital transformation — not having a mobile app, not having tap-on-debit in the middle of COVID. I was a little surprised. It’s been out for a long, long time.

Given that you’re working on a digital-first strategy for Laurentian — do you intend on closing branch locations? Is downsizing part of the future?

Before I even joined, the branches had been rightsized. We used to have over 150 branches in Quebec and we’re down to 60. We don’t necessarily have any plans in terms of closing at this point in time — but yes, we have publicly stated that our strategy is a digital-first strategy complemented with advice and counsel through our salespeople.

How do you woo older customers who may love the experience of walking into a bank branch and actually doing their banking in person?

A large percentage of our existing customer population in our retail network are over the age of 60. We’ve been able to retain many of those clients despite us not having a lot of digital tools. The minute we launched our mobile app, over 25 per cent of our client base immediately downloaded it. I would say that it’s not limited to certain age groups. Pre-pandemic, there were a lot of people resisting digital adoption. The pandemic has been a fantastic catalyst in terms of people adopting it, but digital tools won’t take away from interaction with a human banker when it comes to critical decisions.

In 2020, you became the first woman to run a Canadian chartered bank. How should the banking industry change so you’re not the last?

Listen, I’m delighted to chart the way — and I’m hoping I’m not the last. Hopefully, there will be many more behind me. Creating an equitable, diverse, and inclusive environment is absolutely critical. I think we’ve made some good headway in terms of diversity. I think we need to continue to work harder and challenge yourself and make sure there are equal opportunities. One of the things I always talk about is making sure that women are appointed to businesses that have a profit and loss associated with it. Numbers speak louder than anything else.

Did you have to really fight for that?

I guess I was fortunate in my training and in terms of making sure I was selective in my opportunities — but there’s always an element of luck for sure. I think anyone managing their career needs to proactively be clear about what it is they want to do, and what it is they’re not interested in doing. Running a profit and loss is a very, important component of anyone’s development, whether they be a man or a woman.

The Bank of Canada has bumped its interest rates once already this year and more hikes are coming. How do you plan to steer Laurentian Bank through this?

Interest rate hikes are no surprise. I mean, we were at an all-time low in terms of interest rates. At one point, we were talking about whether we’re actually going to go into negative territory like Europe. It’s not a surprise — as the economy gets better and things get stronger, interest rates go up. To be honest, the first surprise was when the Bank of Canada didn’t raise it 50 basis points the first time.

In terms of managing banks, usually interest rate hikes are a tailwind for us, particularly on the deposit portfolio. But as good credit managers, we’re constantly stresstesting our credit portfolio to understand the impacts on our mortgages or commercial loans. We feel that we’re very well-positioned. We’re very disciplined in terms of our underwriting capabilities. We’re extremely well secured.

You’ve described yourself as an ESG champion. What does that mean to you?

It starts off with me being appointed as the first female CEO of a bank in Canada. When I first joined, my No. 1 goal was to make sure our employees were safe. We launched some wellness campaigns. I also introduced equity, diversity, and inclusion targets in all the leadership scorecards which we report to along with our financial statements. So, how are we doing in terms of promoting women? How are we doing in terms of our BIPOC population?

We’ve also done a lot on the environmental side. We just issued our first-ever ESG report. It talks about how we’refocusing on changing banking for the better. We’ve signed onto the Partnership for Carbon Accounting Financials. In December, we also publicly announced that we’re no longer providing direct funding for the exploration, production, and development of oil and gas or coal.

Obviously, that’s all been underpinned by governance — making sure that our board has oversight functions and we’ve updated their various mandates. So I am the ESG champion, but ultimately the entire organization has made sure that ESG is just part of how we do business.

About a third of Laurentian Bank’s staff left in the 17 or so months since you took over as CEO. Why do you think that happened?

If you look at our historic turnover rate, it’s not far off from what we’ve actually turned over in the last year. With any new change in leadership, new goals, new objectives — there is a combination of voluntary and involuntary absences that happen. We’ve also revisited our organizational structure as well. As part of our restructuring pledge, we did eliminate a number of positions as well.

The reason I’m not too concerned about it is we did an employee survey in September of last year. That was the first employee survey that we had done in nine years at Laurentian Bank, and trust in management was at all-time high of 89 per cent. Even in terms of employee engagement, which is your confidence in recommending others to join the organization, financial industries are usually benchmarked around 75 or 76 per cent. We were at 74. Even with all of the changes, people are really excited about the future of the organization, and they really trust management.

‘‘ Creating an equitable, diverse, and inclusive environment is absolutely critical. I think we’ve made some good headway in terms of diversity. I think we need to continue to work harder and challenge yourself and make sure there are equal opportunities. RANIA LLEWELLYN LAURENTIAN BANK CEO