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 Higher proportion of capital markets-related revenues relative to that of peers Greater dependence on wholesale funding than some peers The stable outlook on National Bank of Canada reflects S&P Global Ratings' view that the likelihood of the ratings moving up or down within the next two years is less than one-third. We could lower our ratings on National Bank if revenues from capital markets were to exceed current levels (around 25% of revenues) for several quarters, risks from noncore activities were to become material, credit quality metrics were to deteriorate to levels that are measurably less

...Outlook: Stable The stable outlook on National Bank of Canada reflects S&P Global Ratings' view that the likelihood of the ratings moving up or down within the next two years is less than one-third. We could lower our ratings on National Bank if revenues from capital markets were to exceed current levels (around 25% of revenues) for several quarters, risks from noncore activities were to become material, credit quality metrics were to deteriorate to levels that are measurably less favorable than the average of the Canadian peers, or the risk-adjusted capital (RAC) ratio were to fall and stay below 7%. Any of these factors would lead to a lower stand-alone credit profile (SACP). In addition, we could lower our ratings if we were to believe that the Canadian government is no longer supporting its systemically important financial institutions before National Bank had built up a substantial position in liabilities eligible for inclusion as additional loss-absorbing capacity under our criteria....

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