National Bank of Canada (TSE:NA) reported a strong start to fiscal 2026, with management highlighting double-digit earnings growth, continued integration progress following the Canadian Western Bank (CWB) transaction, and an expanded share repurchase plan.
First-quarter results and capital actions
For the first quarter of 2026, National Bank generated earnings per share (EPS) of CAD 3.25, an 11% increase year-over-year. President and CEO Laurent Ferreira said results were supported by strong performance across retail and business segments, cost and funding synergies tied to the CWB transaction, and share buybacks.
Management also announced it is seeking regulatory approval to upsize its normal course issuer bid (NCIB) to repurchase up to 14.5 million shares, up from 8 million. The bank has repurchased 6.4 million shares to date under its current program, representing about 80% of the existing authorization. CFO Marie-Chantal Gingras said buybacks reduced the CET1 ratio by 33 basis points during the quarter.
CWB integration, Laurentian transaction, and synergy progress
National Bank said it is continuing to integrate CWB with a focus on client transition. Gingras reported the bank has realized CAD 176 million of cost and funding synergies to date, exceeding its year-one target of CAD 135 million, and reiterated it remains on track to deliver CAD 270 million by the end of fiscal 2026. On revenue synergies, management said it is progressing toward a CAD 50 million target by year-end and characterized first-quarter progress as slightly ahead of plan.
During the Q&A, Commercial and Private Banking head Judith Ménard said early revenue synergies were showing up primarily as non-interest income tied to capital markets, including risk management solutions and M&A activity. She also said the bank expects net interest income synergies to begin materializing in the second half of 2026. Ménard noted the final client migration and conversion was completed “last weekend,” calling it a major milestone, while adding that training and continued integration work remain ongoing.
Separately, Ferreira noted the bank had closed a syndicated loan transaction with Laurentian Bank earlier in the month, with retail SME portfolios expected to close by late 2026, subject to regulatory approvals. Gingras reiterated the previously disclosed expectation that the Laurentian transaction should generate 1.5% to 2% EPS accretion in the first year, which management equated to roughly 30 basis points of ROE.
Segment performance highlights
Management pointed to contributions across all major business lines:
- Personal and Commercial (P&C) Banking: Revenues were more than $1.5 billion and net income was $442 million. Ferreira said personal mortgages grew 3% sequentially, which he described as a strong start toward a mid-single-digit growth target for 2026. Commercial loans grew 1% sequentially, and management still expects to begin growing the CWB portfolio in the second half of the year.
- Wealth Management: Net income increased 13% year-over-year to CAD 274 million, supported by fee-based and transaction revenue growth. Asset under administration rose 3% sequentially to nearly CAD 900 billion, helped by resilient equity markets and strong net sales.
- Capital Markets: Net income was CAD 443 million, up 6% year-over-year, driven by both trading and non-trading activity. Ferreira cited equities strength supported by securities finance and higher structured-product issuance, along with steady opportunities in rates and credit. Management also noted strong equity and debt issuance supporting corporate and investment banking revenues.
- Credigy: Net income was CAD 47 million, with average assets up 9% year-over-year and 1% sequentially. Management said it remained disciplined given competitive pricing conditions.
- ABA Bank: Net income increased 9% year-over-year on balance sheet growth and a build in performing provisions. Revenues rose 13% year-over-year, with deposits up 18% and loans up 11%.
On the P&C segment’s ROE, Ferreira acknowledged it was “subpar versus our peers” and said the bank has started a strategic review with updates expected later in the year.
Revenue growth, margins, and balance sheet trends
Gingras said first-quarter revenues rose 21% year-over-year and pre-tax pre-provision earnings (PTPP) increased 23%, driven by organic performance across segments and the CWB transaction. Excluding CWB, revenues grew 11% and PTPP rose 12%. Expenses increased 10.2%, largely due to higher variable compensation; excluding variable compensation, expenses were up 8.6% on salaries and benefits.
Net interest income (excluding trading) grew 5% sequentially. The bank also generated CAD 12 million in payment revenues in Credigy, adding one basis point to the all-bank margin. In P&C, management cited two basis points of sequential margin expansion driven by higher margins on both loans and deposits. Gingras noted a $30 million reclassification of net interest income from trading to non-trading with no impact on total revenues, and said P&C net interest margin is expected to remain “relatively stable” next quarter.
Loans increased 23% year-over-year (or 9% excluding CWB), reflecting contributions from all segments, while deposits increased $5 billion (or 2%) sequentially. Personal deposits rose CAD 1.5 billion, which management said was driven mostly by wealth management and ABA.
In Q&A, Personal Banking head Julie Lévesque said personal deposits were down about 1% quarter-over-quarter, largely due to expected attrition in CWB’s deposit book, which she described as more rate-sensitive and built around higher-rate offerings. Lévesque added that with rates expected to remain low, deposit growth should stay “neutral.”
Credit performance and outlook
Chief Risk Officer Jean-Sébastien Grisé said Canadian growth remained modest and the labor market “soft,” with persistent headwinds tied to trade tensions and uncertainty around CUSMA. Despite the environment, he said the bank’s portfolio mix and provisioning supported strong credit performance.
Total provisions for credit losses (PCL) were CAD 244 million, or 32 basis points, down one basis point from the previous quarter. Performing provisions increased by three basis points, driven mainly by portfolio growth and partially offset by more favorable macroeconomic scenarios. PCL on impaired loans were CAD 215 million, or 28 basis points, stable quarter-over-quarter and within the bank’s 25–35 basis point guidance for the full year. The gross impaired loan ratio was 111 basis points (excluding USSF&I), while impaired loans were 81 basis points and flat sequentially.
Management said it remains cautious given uncertainty and maintained its impaired PCL outlook of 25–35 basis points for 2026. In discussing its ROE framework, Gingras added that the bank’s 2027 ROE path does not assume any credit “upside” from improving losses.
Looking ahead, Gingras said the bank now expects 2026 EPS growth to be at the top end of its previously communicated 5% to 10% outlook and raised its fiscal 2026 ROE target to around 16% from around 15%, citing first-quarter momentum, synergy execution, credit performance within guidance, and the pace of buybacks.
About National Bank of Canada (TSE:NA)
National Bank of Canada is the sixth-largest Canadian bank. The bank offers integrated financial services, primarily in the province of Quebec as well as the city of Toronto. Operational segments include personal and commercial banking, wealth management, and a financial markets group.
