Standard&Poor's Ratings Services' ratings on Montreal, Que.-based National Bank of Canada (National Bank) reflect the bank's market share in the Province of Quebec and overall performance compared with the Canadian peer group. The strengths of the institution lie primarily in its retail operations with a focus on midmarket commercial lending. Part of the effort to diversify away from Quebec has been through partnership programs. The bank also has a niche presence in western Canada. The stable core earnings and improving credit trend are partially offset by limited geographical diversification and increased exposure to market risk. National Bank's commercial lending operations are primarily directed at the Quebec market, where the strong economy has contributed to the favorable credit trends.
