National Bank Profit Soars 26% on CWB Acquisition Success

MONTREAL, QC – February 25, 2026 – National Bank of Canada today reported a formidable start to its fiscal year, posting a 26% jump in first-quarter net income to $1.25 billion. The impressive results were significantly bolstered by the successful integration of Canadian Western Bank (CWB), validating the bank's aggressive expansion strategy beyond its traditional Quebec stronghold.

Diluted earnings per share for the quarter ended January 31, 2026, rose 11% to $3.08. When excluding costs related to the CWB acquisition and other specified items, adjusted net income also climbed 26% to $1.32 billion, with adjusted diluted earnings per share reaching $3.25, an 11% increase from the previous year.

The performance reflects broad strength across all business segments, a point emphasized by the bank's leadership.

"The first quarter marks a strong start to the year for the Bank, driven by our diversified and complementary franchises, as well as our prudent approach to capital and credit," said Laurent Ferreira, President and Chief Executive Officer of National Bank of Canada. "We are executing on our financial objectives with discipline, driving organic growth and operational efficiency as we reinforce our pan-Canadian reach, and creating long-term value for our shareholders."

The CWB Growth Engine Powers Record Results

The acquisition of Canadian Western Bank, completed in February 2025, has proven to be a powerful growth engine. The integration is tracking well ahead of schedule, with annualized synergies reaching $247 million in the first quarter, rapidly approaching the $270 million target set for the end of fiscal 2026.

The impact was most pronounced in the Personal and Commercial banking segment, which saw its net income skyrocket by 47% to $427 million. CWB's inclusion was a primary factor, contributing $237 million to the segment's revenue lift. This translated into remarkable loan growth that outpaced industry peers; commercial lending expanded by a massive 54%, while personal lending grew 17%. Even excluding the CWB acquisition, the bank demonstrated robust organic growth, with commercial and personal loans up 12% and 11%, respectively.

This strategic move has fundamentally reshaped National Bank's geographic footprint, significantly expanding its presence in key western markets like Alberta and British Columbia and advancing its ambition to become a truly pan-Canadian institution.

Strategic Expansion Continues with Laurentian Bank Deals

Building on the momentum of its western expansion, National Bank is continuing its strategic asset acquisition with two significant transactions involving Laurentian Bank of Canada (LBC).

The first deal, the purchase of LBC's syndicated loan portfolio, was completed on February 17, 2026. National Bank acquired the portfolio for a preliminary purchase price of $646 million, adding approximately $705 million in outstanding loans to its books.

The second, more substantial transaction involves the pending acquisition of LBC's retail and small- and medium-sized enterprise (SME) banking portfolios. This deal, expected to close in late 2026, is contingent on the completion of Fairstone Bank's acquisition of Laurentian Bank. The move will transfer significant assets to National Bank, including approximately C$3.3 billion in retail loans, C$7.6 billion in retail deposits, and another C$1.4 billion in combined SME loans and deposits, based on figures from mid-2025.

This acquisition is projected to be accretive to adjusted earnings per share by 1.5% to 2% in the first year after closing, further bolstering the bank’s bottom line while deepening its customer base. The combined impact of the LBC transactions is expected to reduce the bank's CET1 capital ratio by a manageable 25-30 basis points.

Balancing Growth with Robust Shareholder Returns

Amidst its aggressive growth and acquisition strategy, National Bank has maintained a sharp focus on capital strength and delivering value to its shareholders. The bank's Common Equity Tier 1 (CET1) capital ratio stood at a robust 13.7% as of January 31, 2026, comfortably above the 11.5% regulatory minimum for Canada's largest banks.

This strong capital position provides the foundation for enhanced shareholder returns. The Board of Directors declared a quarterly dividend of $1.24 per common share, a 5.1% increase from the prior dividend. The dividend payout ratio for the quarter was 45.1%.

Furthermore, the bank announced its intention to significantly expand its share repurchase program. It plans to amend its normal course issuer bid (NCIB) to allow for the buyback of up to 14.5 million common shares, a substantial increase from the previous limit of 8 million shares. This move, subject to regulatory approval, signals strong management confidence in the bank's valuation and future prospects, providing another lever to enhance shareholder value by reducing the number of outstanding shares.

Navigating a Cautious Economic Landscape

National Bank's strong performance comes against a backdrop of a slowing Canadian economy, characterized by a subdued housing market and lingering uncertainty. While some competitors have reported rising provisions for credit losses (PCLs) amid signs of consumer stress, National Bank's provisions decreased slightly to $244 million from $254 million a year ago, primarily due to lower provisions on non-impaired loans.

This resilience can be partly attributed to the bank's strong footing in Quebec's more stable housing market, which has provided a buffer against the more significant slowdowns experienced in major centers like Toronto and Vancouver. The bank's prudent credit management and diversified business model, which includes a strong Capital Markets division and a U.S. Specialty Finance arm, have also contributed to its solid performance.

While headwinds such as softer labor markets and modest income growth persist, National Bank’s disciplined execution and successful integration of strategic acquisitions have positioned it to effectively navigate the anticipated economic slowdown while continuing to pursue its pan-Canadian growth ambitions.