National Bank of Canada

The stable outlook reflects S&P Global Ratings' expectations that over the two-year outlook horizon, NBC will sustain: Strong operating results helped by good cost discipline; Conservative underwriting standards; Capital that is neutral to the ratings; and Funding and liquidity metrics in line with those of peers. The outlook also reflects our expectation the bank will close its acquisition of CWB and successfully complete the systems conversion. We could lower NBC's stand-alone credit profile (SACP) if: Net charge-offs (NCOs) rise meaningfully and are sustainably higher than those of peers; Revenues from the capital markets operations become outsize relative to those of peers; or Unexpected issues arise from the CWB acquisition that could negatively affect the bank. We could raise NBC's SACP

...National Bank of Canada's planned acquisition of Canadian Western Bank will help geographic diversification. National Bank of Canada's (NBC) proposed acquisition of Canadian Western Bank (CWB), announced on June 11, 2024, is in line with the bank's desire to expand its presence outside Quebec, and will create opportunities to offer cash management capabilities and wealth management products to CWB clients. CWB will modestly add to NBC's geographic diversification in Western Canada and Ontario. We expect the impact on capital will be modest, as the deal is largely an exchange of common shares. Certain credit metrics are slightly more favorable than peers'; however, the bank is more exposed to capital markets, and its international loan portfolio, although small, adds to risk. NBC's asset quality metrics are slightly more favorable than the peer averages with the exception of the reserving level, which is lower. We view the bank's risk profile as slightly more elevated than that of some peers...

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