National Bank of Canada reports rise in profits as it looks to closing CWB deal

MONTREAL — National Bank reported a rise in its fourth-quarter profit and raised its dividend as it looks to a transformational year ahead with the likely closing of its acquisition of Canadian Western Bank.

“Our proposed acquisition of Canadian Western Bank will be a key pillar in our domestic growth in 2025,” chief executive Laurent Ferreira told a conference call to discuss the company’s latest results.

The roughly $5-billion takeover has been moving closer to completion, including CWB shareholder and Competition Bureau approval in September, while approvals needed to reorganize CWB capital and federal finance department public consultations were completed in November, he said.

The deal still requires approval from Canada’s banking regulator and the finance minister, though analysts don’t expect any major challenges to the deal given how little overlap the two banks have.

“We look forward to bringing together two strong teams and highly complementary platforms to accelerate our growth,” Ferreira said.

For the fourth quarter, National Bank reported a profit of $955 million or $2.66 per diluted share for the quarter ended Oct. 31, up from a profit of $751 million or $2.09 per diluted share in the same quarter last year.

Revenue for the quarter totalled $2.94 billion, up from $2.56 billion a year earlier, while the bank’s provision for credit losses amounted to $162 million, up from $115 million a year ago.

The Montreal-based bank also said Wednesday it will now pay a quarterly dividend of $1.14 per share, up from $1.10 per share.

On an adjusted basis, National Bank says it earned $2.58 per diluted share in its latest quarter, up from an adjusted profit of $2.39 per diluted share in the same quarter last year.

The average analyst estimate had been for an adjusted profit of $2.57 per share, according to data provided by LSEG Data & Analytics.

The bank came in ahead of expectations in part from a lower tax rate and despite provisions being slightly higher than expected, Jefferies analyst John Aiken wrote in a note.

Credit weakened in both in retail and in its commercial division where impairments were widespread across manufacturing, agriculture, financial services and real estate, he said.

National Bank said its personal and commercial banking business earned $327 million, up from $271 million in the same quarter last year, while its wealth management business earned $219 million, up from $155 million a year ago.

The bank’s financial markets business earned $306 million, up from $284 million a year earlier.

National Bank’s U.S. specialty finance and international business, which mainly comprises its Credigy Ltd. and Advanced Bank of Asia Ltd. subsidiaries, earned $157 million, up from $145 million in the same quarter last year.

The bank’s “other” segment reported a loss of $54 million in its latest quarter compared with a loss of $104 million a year earlier.

This report by The Canadian Press was first published Dec. 4, 2024.

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The Canadian Press