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Laurentian Bank taps into oil patch with energy banking move

The logo of Laurentian Bank is seen at its head offices in Montreal, April 1, 2015.

CHRISTINNE MUSCHI/REUTERS

Laurentian Bank of Canada is setting up an energy banking practice in Calgary, despite the collapse in oil prices that has thinned the number of dealers serving the sector.

Montreal-based Laurentian Bank Securities has hired former GMP Capital Inc. energy banker Wade Felesky to lead the effort in the oil patch, which is expected to be a small shop compared with the energy franchises run by the Big Six major Canadian banks.

"Mr. Felesky will be responsible for the expansion of LBS' equity division into the oil & gas sector," Laurentian spokeswoman Hélène Soulard confirmed in an e-mail.

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She said she was unable to immediately provide more details of the move, such as the number of professionals the company will hire, the client base it is targeting or what services it will offer.

However, one well-placed source said the unit, to include just a handful of professionals, is expected to concentrate on trading, institutional sales, equity research and merger and acquisition advisory services. Corporate lending is not said to be part of the current plan.

Indeed, a top executive touted the institution's limited energy-related risks at a conference in September.

"We don't have direct exposure in oil and gas. So when you compare us with the others, that actually plays in our favour right now," said Stephane Therrien, executive vice-president of personal and commercial banking.

Laurentian is getting into the sector at a tricky time, in a move that suggests the bank believes the industry is in recovery after two years of financial pain and presents an opportunity as a result.

The energy downturn has been rough on the dealers that raise money for oil companies and advise them on mergers and acquisitions. Several smaller brokerages and international players have closed Calgary offices or shut down altogether. This summer, GMP agreed to buy FirstEnergy Capital Corp. in a $98.6-million deal, further consolidating business in downtown Calgary.

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About the Author
Mergers and Acquisitions Reporter

Jeffrey Jones is a veteran journalist specializing in mergers, acquisitions and private equity for The Globe and Mail’s Report on Business. Before joining The Globe and Mail in 2013, he was a senior reporter for Reuters, writing news, features and analysis on energy deals, pipelines, politics and general topics. More

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