Research Update: National Bank of Canada Upgraded To 'A+' From 'A' On Revised View Of Systemic Importance; Outlook Stable

In the past several years, the National Bank of Canada has steadily expanded its business beyond its traditional home market of Quebec to the rest of Canada and we expect its efforts will be further bolstered by its planned acquisition of Canadian Western Bank (CWB) for C$5.0 billion, announced June 11, 2024, which is expected to close in 2025. We think that these strategic initiatives--as well as our view of the interconnectedness of the bank's capital markets business and role in the economy--increase the likelihood of extraordinary government support in the event of financial distress, and in turn increases the ratings uplift that we incorporate in our ratings on the bank. Therefore, S&P Global Ratings raised its long-term issuer credit

...- In the past several years, the National Bank of Canada has steadily expanded its business beyond its traditional home market of Quebec to the rest of Canada and we expect its efforts will be further bolstered by its planned acquisition of Canadian Western Bank (CWB) for C$5.0 billion, announced June 11, 2024, which is expected to close in 2025. - We think that these strategic initiatives--as well as our view of the interconnectedness of the bank's capital markets business and role in the economy--increase the likelihood of extraordinary government support in the event of financial distress, and in turn increases the ratings uplift that we incorporate in our ratings on the bank. - Therefore, S&P Global Ratings raised its long-term issuer credit rating on National Bank of Canada to 'A+' from 'A' and affirmed the bank's 'a-' stand-alone credit profile. We also raised our ratings on the bank's legacy senior unsecured debt, long-term commercial paper, and certificates of deposit. - The stable...

Research Update