National Bank of Canada (TSE:NA) opened its 24th annual financial conference with remarks from Jean-Philippe Cousineau, head of institutional equity sales and trading at National Bank Capital Markets, who thanked institutional and corporate attendees and framed the two-day event as a forum for discussing fast-moving geopolitical and economic developments.
Cousineau pointed to major themes that have shaped recent investor conversations—last year’s focus on tariffs and their expected inflationary impact, and this year’s concerns tied to the situation in Iran, upcoming USMCA negotiations, a slowing economy, and demographic pressures. He also highlighted planned lunchtime sessions featuring Canada’s Superintendent of Financial Institutions Peter Routledge in conversation with Gabriel Dechaine, and a separate talk the following day with National Bank’s chief economist, Stéfane Marion, on his outlook for the world and Canada.
Ferreira: Iran risks rising, but outlook unchanged
On risk management and investor confidence during volatile periods, Ferreira emphasized continuity. He said the bank was not changing its approach to capital management, provisioning, liquidity, or its broader strategy and capital deployment. He pointed to the bank’s trading performance during stressful and volatile times as evidence of its ability to manage through stress periods, while acknowledging heightened awareness when geopolitical stress rises.
Canada’s agenda: productivity, internal trade barriers, and energy
Turning to Canada’s economic prospects, Ferreira said there was “a lot to be excited about,” citing what he described as a shift in Ottawa over the past year toward a clearer economic agenda focused on productivity and global competitiveness. He said engagement between the federal government and the business community had improved significantly, while acknowledging execution challenges and adding he wished progress would move faster.
Ferreira singled out interprovincial barriers as a major economic cost and said politics was the only factor slowing progress. He also argued that Canada should pursue energy export options more aggressively, including reviving the Keystone pipeline, doubling down on LNG development in Western Canada, and increasing natural gas flows to Quebec and Ontario. He also raised the possibility of an “eastern coalition” approach, advocating for greater offshore oil, natural gas, and LNG development in Eastern Canada involving Quebec.
As an example he found striking, Ferreira said Canada took delivery of LNG in New Brunswick from Australia, describing the situation as one that should prompt accelerated action. He added that he did not see capital availability as the constraint, saying Canadian financial institutions are well capitalized and ready to support government initiatives.
Quebec: consumer fundamentals and manufacturing exposure
Asked about Quebec’s outlook and risks, Ferreira said fundamentals remain robust, citing a less leveraged consumer and lower real estate froth relative to other regions. He said there is a roughly 50% home price gap between Montreal and Toronto and described Quebec as having higher saving rates. He also said National Bank’s credit data shows delinquencies improving in Quebec relative to the rest of Canada.
On manufacturing and trade tensions, Ferreira noted Quebec’s economy is diversified and less concentrated than Ontario’s auto exposure. He said manufacturing represents about 12% of Quebec GDP compared with a 9% national average, meaning tariffs and trade tensions do have an impact. However, he highlighted areas he viewed as advantages, including hydro expertise and transmission, critical minerals, and Atlantic access that could support defense-related supply chains.
Targets, private credit conditions, and a strategic review
Dechaine also questioned Ferreira on National Bank’s financial targets and the relationship between organic earnings growth and risk-weighted asset (RWA) growth. Ferreira said the bank was comfortable with its assumptions and reiterated confidence in achieving its targets, including a 2027 base-case return on equity target of “17+.” He said the bank expected to sustain momentum similar to what it has seen in 2025 and in the first quarter, citing momentum across businesses including personal and commercial banking, capital markets, Credigy, ABA, and wealth and advisory activities that can be less RWA-intensive. He acknowledged that higher recession risk could lead to higher provisions for credit losses (PCLs) over time, but said management remained confident in the targets.
On private credit, Ferreira said negative press had not yet affected Credigy’s deal pipeline. He described continued liquidity in the U.S. market and said the bank was still seeing transactions where pricing, covenants, and deal structures were not within its risk parameters and, in his view, did not address potential risks. He said the bank was monitoring whether higher rates and inflation pressures tied to Middle East developments could change conditions, but added the shift had not yet shown up in the pipeline.
Ferreira also addressed comments made on the first-quarter call about a strategic review involving the Canadian banking segment. He said the bank is in a strategic process for the whole organization, not only personal and commercial banking. In retail, he said the bank is reviewing channels—including digital, branches, and its call center—after concluding they are not well integrated. He pointed to work needed on automation and digital capabilities, as well as a cost aspect. Ferreira said he expects accelerated retail disruption over the next five years, citing AI, tokenization, stablecoins, and digital assets, as well as potential bank challengers seeking licenses and government focus on competition, which he said could pressure fees and deposits. He said more detail could come toward the end of the year, potentially including the “magnitude and upside” on earnings and ROE.
CWB integration, ABA options, and regulatory concerns
On the Canadian Western Bank (CWB) acquisition and integration, Ferreira said the bank was moving from expense and funding synergies toward revenue synergies. He said integration work—including technology migration, training, and client outreach—was extensive, and described execution as strong. He said CWB’s balance sheet was affected by deliberate actions including commercial real estate paydowns and reducing exposure to more expensive broker deposits.
Ferreira said early momentum in areas like foreign exchange, swaps, and advisory has been encouraging, and he reiterated confidence in delivering revenue synergies of about CAD 50 million in 2026 and an additional CAD 90 million in 2027. He added that CWB is now a more competitive platform with a full product suite, technology, retail, and wealth capabilities, and that he expects growth momentum to build in the second half of the year.
Discussing Southeast Asia, Ferreira said ABA has a strong digital platform and risk management tools, and he raised the possibility of expanding outside Cambodia with a local partner. He also said the bank could consider opening ABA’s cap table to institutional investors, while emphasizing the bank is not in a hurry and would only pursue a partnership with the right fit.
On regulation, Ferreira said the Fundamental Review of the Trading Book (FRTB) was an example of an uneven playing field, and suggested it should be removed. He also raised the RWA treatment for SMEs as an important policy topic, arguing it should be addressed directly rather than relying on measures that effectively “yo-yo” bank behavior. He characterized the relationship between OSFI and the financial industry as stable and respectful, but said he wished processes would move faster.
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.
