Bulletin: National Bank of Canada's Planned Acquisition Of Canadian Western Bank Could Moderately Diversify Geographic Loan Mix

TORONTO (S&P Global Ratings) June 14, 2024--S&P Global Ratings today said National Bank of Canada's (NBC; A/Stable/A-1) announced planned acquisition of Canadian Western Bank (CWB) for C$5 billion is consistent with its ratings on the bank but could, over time, help modestly diversify NBC's franchise, which is concentrated in Quebec. At the end of second-quarter 2024, Edmonton-based CWB had C$37 billion of loans compared with C$235 billion at NBC. We believe this planned acquisition is consistent with the bank's aspirations to expand outside of Quebec. Although the acquisition accelerates this strategy by bolstering the bank's existing presence in Western Canada and Ontario, we note NBC's national footprint post-acquisition will remain smaller than that of higher-rated peers. The acquisition will increase

...June 14, 2024 TORONTO (S&P Global Ratings) June 14, 2024--S&P Global Ratings today said National Bank of Canada's (NBC; A/Stable/A-1) announced planned acquisition of Canadian Western Bank (CWB) for C$5 billion is consistent with its ratings on the bank but could, over time, help modestly diversify NBC's franchise, which is concentrated in Quebec. At the end of second-quarter 2024, Edmonton-based CWB had C$37 billion of loans compared with C$235 billion at NBC. We believe this planned acquisition is consistent with the bank's aspirations to expand outside of Quebec. Although the acquisition accelerates this strategy by bolstering the bank's existing presence in Western Canada and Ontario, we note NBC's national footprint post-acquisition will remain smaller than that of higher-rated peers. The acquisition will increase NBC's concentration to commercial loans to 52% from 40% of total loans, despite its geographic diversification benefits. Although CWB's credit quality metrics have been weakening,...

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