National Bank of Canada

Stable core profitability and capital adequacy Strong presence in retail and midmarket commercial lending in Quebec Dependence on Quebec for revenue growth and margins Competitive challenges expanding outside of Quebec Higher proportion of capital markets-related revenues relative to that of peers Standard&Poor's Ratings Services' outlook on The National Bank of Canada (NBC) is negative, the same as the other five large Canadian banks, reflecting our possible reassessment of the likelihood of extraordinary government support given the expected future implementation of a bail-in policy framework in Canada. Depending on the features of the policy that will be introduced, and consequential actions by NBC, uplift based on additional loss-absorbing capacity (as we define it) could, in future, take the place

...Outlook: Negative Standard & Poor's Ratings Services' outlook on The National Bank of Canada (NBC) is negative, the same as the other five large Canadian banks, reflecting our possible reassessment of the likelihood of extraordinary government support given the expected future implementation of a bail-in policy framework in Canada. Depending on the features of the policy that will be introduced, and consequential actions by NBC, uplift based on additional loss-absorbing capacity (as we define it) could, in future, take the place of uplift currently incorporated in the issuer credit rating that is based on our expectation of extraordinary government support. We could lower the stand-alone credit profile (SACP) if growth in unsecured consumer loans were to materially accelerate, asset quality metrics were to deteriorate to levels that would be unfavorable relative to peer averages, if risks from non-core activities become material, if the forecast risk-adjusted capital (RAC) ratio were to...

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