REG - Nat Bank of Canada - Press release Q2 2025
28/05/2025 14:30
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RNS Number : 4555K National Bank of Canada 28 May 2025
RNS Number: 4555K
National Bank of Canada
May 28, 2025
Regulatory Announcement
Q2 2025 Results
National Bank of Canada (the "Bank") announces publication of its Second
Quarter 2025 Release. The Second Quarter Results have been uploaded to the
National Storage Mechanism and will shortly be available at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) and is available on
the Bank's website at
https://www.nbc.ca/about-us/investors/quarterly-results.html
(https://www.nbc.ca/about-us/investors/quarterly-results.html)
To view the full PDF of this Second Quarter 2025 Release, please click on the
following link:
http://www.rns-pdf.londonstockexchange.com/rns/4555K_1-2025-5-28.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/4555K_1-2025-5-28.pdf)
National Bank reports its results for the Second Quarter of 2025 and raises
its quarterly dividend by 4 cents to $1.18 per share
The financial information reported in this document is based on the unaudited
interim condensed consolidated financial statements for the quarter and the
six-month period ended April 30, 2025 and is prepared in accordance with
IAS 34 - Interim Financial Reporting as issued by the International
Accounting Standards Board (IASB). All amounts are presented in Canadian
dollars.
MONTREAL, May 28, 2025 - For the second quarter of 2025, National Bank is
reporting net income of $896 million, down 1% from $906 million in the second
quarter of 2024 and diluted earnings per share stood at $2.17 compared to
$2.54 in the second quarter of 2024. Excluding specified items((1)) recorded
in the second quarter of 2025, notably the acquisition and integration costs
related to the acquisition of Canadian Western Bank (CWB)((2)), which was
completed on February 3, 2025 as well as the initial provisions for credit
losses on non-impaired loans acquired, adjusted net income((1)) stood at
$1,166 million compared to $906 million in the corresponding quarter of 2024.
Adjusted diluted earnings per share((1)) stood at $2.85, up 12% from $2.54 in
the second quarter of 2024.
For the six-month period ended April 30, 2025, the Bank's net income totalled
$1,893 million, up 4% from $1,828 million for the corresponding period of
2024. Diluted earnings per share stood at $4.91 for the six-month period ended
April 30, 2025 versus $5.13 for the corresponding period in 2024, the decrease
being attributable to the common shares issued as part of the acquisition of
CWB((2)). Excluding specified items((1)), adjusted net income((1)) for the
six-month period ended April 30, 2025 totalled $2,216 million, up 21% from
$1,828 million for the six-month period ended April 30, 2024, and adjusted
diluted earnings per share((1)) stood at $5.78, up 13% from $5.13 for the
six-month period ended April 30, 2024.
"The Bank delivered strong second quarter results, supported by solid organic
growth in our business segments. We were also pleased to complete the
acquisition of Canadian Western Bank during the quarter, marking a significant
step forward in the acceleration of our domestic strategy and in extending the
depth and reach of our banking capabilities for our clients," said Laurent
Ferreira, President and Chief Executive Officer of National Bank of Canada.
"In the context of continued geopolitical and geoeconomic uncertainty, our
strong capital position allows us to support business growth," concluded
Mr. Ferreira.
Highlights
(millions of Canadian dollars) Quarter ended April 30 Six months ended April 30
2025((2)) 2024((3)) % Change 2025((2)) 2024((3)) % Change
Net income 896 906 (1) 1,893 1,828 4
Diluted earnings per share (dollars) $ 2.17 $ 2.54 (15) $ 4.91 $ 5.13 (4)
Income before provisions for credit losses and income taxes 1,708 1,278 34 3,245 2,539 28
Return on common shareholders' equity((4)) 11.9 % 16.9 % 14.0 % 17.0 %
Dividend payout ratio((4)) 42.2 % 43.2 % 42.2 % 43.2 %
Operating results - Adjusted((1))
Net income - Adjusted 1,166 906 29 2,216 1,828 21
Diluted earnings per share - Adjusted (dollars) $ 2.85 $ 2.54 12 $ 5.78 $ 5.13 13
Income before provisions for credit losses and income taxes - Adjusted 1,850 1,278 45 3,460 2,539 36
As at As at
April 30, October 31, 2024
2025
CET1 capital ratio under Basel III((5)) 13.4 % 13.7 %
Leverage ratio under Basel III((5)) 4.7 % 4.4 %
(1) See the Financial Reporting Method section on pages 4 to 7 for
additional information on non-GAAP financial measures.
(2) On February 3, 2025, the Bank completed the acquisition of
CWB. CWB's results were consolidated from the closing date, which impacted the
results, balances and ratios for the quarter and the six-month period ended
April 30, 2025. For additional information on the impact of the CWB
acquisition, see the Acquisition section in the Report to Shareholders -
Second quarter of 2025, which is available on the Bank's website at nbc.ca or
the SEDAR+ website at sedarplus.ca.
(3) Certain amounts have been adjusted to reflect the
discontinuation of taxable equivalent basis reporting for revenues and income
tax expense. For additional information, see the Financial Reporting Method
section.
(4) For details on the composition of these measures, see the
Glossary section on pages 51 to 54 in the Report to Shareholders - Second
Quarter 2025, which is available on the Bank's website at nbc.ca or the SEDAR+
website at sedarplus.ca.
(5) For additional information on capital management measures, see
the Financial Reporting Method section on pages 6 to 12 in the Report to
Shareholders - Second Quarter 2025, which is available on the Bank's website
at nbc.ca or the SEDAR+ website at sedarplus.ca.
Personal and Commercial((1))
- Net income totalled $132 million in the second quarter of 2025
versus $311 million in the second quarter of 2024, a 58% decrease. Adjusted
net income((2)) totalled $316 million, up 2% from the corresponding quarter
of 2024.
- At $1,416 million, second-quarter total revenues rose $285 million
or 25% year over year due to the inclusion of CWB, which represents $240
million or 21%, as well as to an increase in net interest income related to
growth in loan and deposit volumes, partly offset by a lower net interest
margin.
- Compared to a year ago, personal lending grew 11% and commercial
lending grew 64%, mainly due to the inclusion of CWB loans during the second
quarter of 2025.
- The net interest margin((3)) stood at 2.30% in the second quarter
of 2025, down from 2.36% in the second quarter of 2024.
- Second-quarter non-interest expenses stood at $804 million, up 31%
year over year, of which the inclusion of CWB drove a 25% increase.
- Provisions for credit losses rose $337 million year over year,
mainly due to the initial provisions for credit losses of $230 million on
non-impaired loans acquired from CWB as well as provisions for credit losses
on impaired loans and non-impaired loans in Personal Banking and Commercial
Banking.
- At 56.8%, the second-quarter efficiency ratio((3)) had
deteriorated compared to 54.1% in the second quarter of 2024, partly due to
specified items((2)) related to the acquisition of CWB.
Wealth Management((1))
- Net income totalled $232 million in the second quarter of 2025, a
13% increase from $205 million in the corresponding quarter of 2024.
- Second-quarter total revenues amounted to $791 million compared to
$683 million in second-quarter 2024, a $108 million or 16% increase driven
mainly by growth in fee-based revenues, net interest income and the inclusion
of CWB revenues.
- Second-quarter non-interest expenses stood at $476 million versus
$400 million in second-quarter 2024, a 19% increase associated with revenue
growth and with the impact of the inclusion of CWB.
- At 60.2%, the second-quarter efficiency ratio((3)) had
deteriorated compared to 58.6% in the second quarter of 2024.
Financial Markets((1))
- Net income totalled $501 million in the second quarter of 2025, up
56% from $322 million in the second quarter of 2024.
- Second-quarter total revenues amounted to $1,101 million, a 62%
increase that was mainly due to growth in global markets revenues.
- Second-quarter non-interest expenses stood at $403 million in
second-quarter 2025 compared to $312 million in second-quarter 2024, an
increase that was due to higher variable compensation.
- Second-quarter provisions for credit losses were $64 million
compared to $11 million in the same quarter of 2024, owing to provisions for
credit losses on impaired loans.
- At 36.6%, the efficiency ratio((3)) had improved from 45.8% in the
second quarter of 2024 due to the marked increase in revenues.
U.S. Specialty Finance and International
- Net income totalled $169 million in the second quarter of 2025, up
4% from $163 million in the second quarter of 2024.
- Second-quarter total revenues amounted to $390 million, an 11%
year-over-year increase driven mainly by revenue growth at the ABA Bank
subsidiary.
- Non-interest expenses for the second quarter of 2025 stood at $117
million, an 8% year-over-year increase attributable to business growth at the
Credigy and ABA Bank subsidiaries.
- Second-quarter provisions for credit losses were up $22 million
year over year, with the increase being attributable to both Credigy and ABA
Bank.
- At 30.0%, the efficiency ratio((3)) had improved from 30.9% in the
second quarter of 2024.
Other((1))
- The Other segment reported a net loss of $138 million in the
second quarter of 2025 compared to a net loss of $95 million in the same
quarter of 2024, owing to the CWB acquisition and integration charges, which
are considered specified items((2)), partly offset by a higher contribution
from Treasury activities and the inclusion of CWB revenues in the second
quarter of 2025.
Capital Management((1))
- As at April 30, 2025, the Common Equity Tier 1 (CET1) capital
ratio under Basel III((4)) stood at 13.4%, down from 13.7% as at October 31,
2024. The decrease is mainly explained by the growth in the risk-weighted
assets partly due to the inclusion of CWB.
- As at April 30, 2025, the Basel III((4)) leverage ratio was 4.7%,
up from 4.4% as at October 31, 2024.
Dividends
- On May 27, 2025, the Board of Directors declared regular dividends
on the various series of first preferred shares and a dividend of $1.18 per
common share, up 4 cents or 3.4%, payable on August 1, 2025 to shareholders of
record on June 30, 2025.
(1) On February 3, 2025, the Bank completed the acquisition of
CWB. CWB's results were consolidated from the closing date, which impacted the
results, balances and ratios for the quarter and six-month period ended April
30, 2025. For additional information on the impact of the CWB acquisition, see
the Acquisition section in the Report to Shareholders - Second quarter of
2025, which is available on the Bank's website at nbc.ca or the SEDAR+ website
at sedarplus.ca.
(2) See the Financial Reporting Method section on pages 4 to 7 for
additional information on non-GAAP financial measures.
(3) For details on the composition of these measures, see the
Glossary section on pages 51 to 54 in the Report to Shareholders - Second
Quarter 2025, which is available on the Bank's website at nbc.ca or the SEDAR+
website at sedarplus.ca.
(4) For additional information on capital management measures, see
the Financial Reporting Method section on pages 6 to 12 in the Report to
Shareholders - Second Quarter 2025, which is available on the Bank's website
at nbc.ca or the SEDAR+ website at sedarplus.ca.
Acquisition
Canadian Western Bank (CWB) Acquisition
On February 3, 2025, the Bank completed the acquisition of CWB, a diversified
financial services institution based in Edmonton, Alberta, in which the Bank
had already been holding a 5.9% equity interest. This transaction will enable
the Bank to accelerate its growth across Canada. The business combination
brings together two complementary Canadian banks with growing businesses,
thereby enhancing customer service by offering a full range of products and
services nationwide, with a regionally focused service model.
The total consideration transferred of $6.8 billion included $5.3 billion for
100% of the common shares of CWB acquired by way of a share exchange at an
exchange ratio of 0.450 of a common share of the National Bank for each CWB
common share, other than those held by the National Bank, $1.4 billion for
the settlement of pre-existing relationships and $0.1 billion for the issuance
of replacement share-based payment award. The fair value of the Bank's common
shares issued was determined on the basis of the share price on the Toronto
Stock Exchange (TSX) at closing on January 31, 2025 being a price of $128.99
per share. At acquisition date, the Bank obtained a 100% interest in the CWB
voting shares and the 5.9% previously held interest was remeasured to its fair
value of $0.3 billion. The non-controlling interest in CWB recognized at
acquisition date was measured at a fair value of $0.6 billion and represents
CWB's preferred shares and Limited Recourse Capital Notes (LRCN) outstanding
on that date. Total purchase consideration amounted to $7.7 billion.
Based on the estimated fair values, the preliminary purchase price allocation,
including goodwill, assigns $45.4 billion to assets and $37.7 billion to
liabilities at acquisition date. The estimated goodwill of $1.6 billion
reflects the expected expense synergies from our Personal and Commercial and
Wealth Management banking services operations, expected funding synergies, and
the expected growth from the product and service platform at a national scale.
Goodwill is not deductible for tax purposes.
For additional information on the impact of the CWB acquisition, see the
Acquisition section in the Report to Shareholders - Second quarter of 2025,
which is available on the Bank's website at nbc.ca or the SEDAR+ website at
sedarplus.ca.
Financial Reporting
Method
The Bank's Consolidated Financial Statements are prepared in accordance with
International Financial Reporting Standards, as issued by the IASB and
represent Canadian GAAP.
Effective November 1, 2024, the Bank discontinued taxable equivalent basis
(TEB) reporting for revenues and income taxes. Using the TEB method is less
relevant since the introduction of the Pillar 2 rules (global minimum tax)
during the first quarter of 2025 and Bill C-59 in relation to the taxation of
certain Canadian dividends during fiscal 2024. This change has no impact on
net income previously disclosed. Data for the 2024 periods were adjusted to
reflect this change.
On February 3, 2025, the Bank completed the acquisition of CWB. CWB's results
were consolidated from the closing date, which impacted the results, balances
and ratios for the quarter and six-month period ended April 30, 2025 in the
Personal and Commercial, Wealth Management, and Financial Markets segments and
in the Other heading of segment disclosures. For additional information on the
impact of the CWB acquisition, see the Acquisition section in the Report to
Shareholders - Second quarter of 2025, which is available on the Bank's
website at nbc.ca or the SEDAR+ website at sedarplus.ca.
Non-GAAP and Other Financial Measures
The Bank uses a number of financial measures when assessing its results and
measuring overall performance. Some of these financial measures are not
calculated in accordance with GAAP. Regulation 52-112 Respecting Non-GAAP and
Other Financial Measures Disclosure (Regulation 52-112) prescribes disclosure
requirements that apply to the following measures used by the Bank:
· non-GAAP financial measures;
· non-GAAP ratios;
· supplementary financial measures;
· capital management measures.
Non-GAAP Financial Measures
The Bank uses non-GAAP financial measures that do not have standardized
meanings under GAAP and that therefore may not be comparable to similar
measures used by other companies. Presenting non-GAAP financial measures helps
readers to better understand how management analyzes results, shows the
impacts of specified items on the results of the reported periods, and allows
readers to better assess results without the specified items if they consider
such items not to be reflective of the underlying performance of the Bank's
operations.
The key non-GAAP financial measures used by the Bank to analyze its results
are described below, and a quantitative reconciliation of these measures is
presented in the tables in the Reconciliation of Non-GAAP Financial Measures
section on pages 5 to 7. It should be noted that, for the quarter and the
six-month period ended April 30, 2025, as part of the CWB transaction, several
acquisition-related items have been excluded from results since, in the
opinion of management, they do not reflect the underlying performance of the
Bank's operations, in particular, acquisition and integration charges,
amortization of intangible assets related to the CWB acquisition and initial
provisions for credit losses on non-impaired loans acquired from CWB. In
addition, for the six-month period ended April 30, 2025, the amortization of
subscription receipt issuance costs, the gain resulting from the remeasurement
at fair value of the CWB common shares previously held by the Bank and the
loss resulting from the impact of managing fair value changes were excluded
from the results. For the quarter and the six-month period ended April 30,
2024, no specified items had been excluded from results.
For additional information on non-GAAP financial measures, non-GAAP ratios,
supplementary financial measures, and capital management measures, see the
Financial Reporting Method section and the Glossary section, on pages 6 to 12
and 51 to 54, respectively, of the Report to Shareholders - Second quarter of
2025, which is available on the Bank's website at nbc.ca or the SEDAR+ website
at sedarplus.ca.
Reconciliation of Non-GAAP Financial Measures
Presentation of Results - Adjusted
(millions of Canadian dollars) Quarter ended April 30
2025((1)) 2024((2))
Personal and Commercial Wealth Management Financial Markets USSF&I Other
Total Total
Operating results
Net interest income 1,146 230 (505) 356 (22) 1,205 635
Non-interest income 270 561 1,606 34 (26) 2,445 2,115
Total revenues 1,416 791 1,101 390 (48) 3,650 2,750
Non-interest expenses 804 476 403 117 142 1,942 1,472
Income before provisions for credit losses and income taxes 612 315 698 273 (190) 1,708 1,278
Provisions for credit losses 426 (1) 64 59 (3) 545 138
Income before income taxes (recovery) 186 316 634 214 (187) 1,163 1,140
Income taxes (recovery) 54 84 133 45 (49) 267 234
Net income 132 232 501 169 (138) 896 906
Items that have an impact on results
Non-interest expenses
CWB acquisition and integration charges((3)) 1 3 − − 114 118 −
Amortization of intangible assets related to the CWB acquisition((4)) 23 1 − − − 24 −
Impact on non-interest expenses 24 4 − − 114 142 −
Provisions for credit losses
Initial provisions for credit losses on non-impaired loans acquired from 230 − − − − 230 −
CWB((5))
Impact on provisions for credit losses 230 − − − − 230 −
Income taxes
Income taxes on the CWB acquisition and integration charges((3)) − (1) − − (31) (32) −
Income taxes on the amortization of intangible assets related to the (6) − − − − (6) −
CWB acquisition((4))
Income taxes on initial provisions for credit losses on non-impaired (64) − − − − (64) −
loans acquired from CWB((5))
Impact on income taxes (70) (1) − − (31) (102) −
Impact on net income (184) (3) − − (83) (270) −
Operating results - Adjusted
Net interest income - Adjusted 1,146 230 (505) 356 (22) 1,205 635
Non-interest income - Adjusted 270 561 1,606 34 (26) 2,445 2,115
Total revenues - Adjusted 1,416 791 1,101 390 (48) 3,650 2,750
Non-interest expenses - Adjusted 780 472 403 117 28 1,800 1,472
Income before provisions for credit losses and income taxes - Adjusted 636 319 698 273 (76) 1,850 1,278
Provisions for credit losses - Adjusted 196 (1) 64 59 (3) 315 138
Income before income taxes (recovery) - Adjusted 440 320 634 214 (73) 1,535 1,140
Income taxes (recovery) - Adjusted 124 85 133 45 (18) 369 234
Net income - Adjusted 316 235 501 169 (55) 1,166 906
(1) On February 3, 2025, the Bank completed the acquisition of
CWB. CWB's results were consolidated from the closing date, which impacted the
results, balances and ratios for the quarter ended April 30, 2025. For
additional information on the impact of the CWB acquisition, see the
Acquisition section in the Report to Shareholders - Second quarter of 2025,
which is available on the Bank's website at nbc.ca or the SEDAR+ website at
sedarplus.ca.
(2) Certain amounts have been adjusted to reflect the
discontinuation of taxable equivalent basis reporting for revenues and income
taxes.
(3) During the quarter ended April 30, 2025, the Bank recorded
acquisition and integration charges of $118 million ($86 million net of income
taxes) related to the CWB transaction.
(4) During the quarter ended April 30, 2025, the Bank recorded an
amount of $24 million ($18 million net of income taxes) to reflect the
amortization of intangible assets related to the CWB acquisition.
(5) During the quarter ended April 30, 2025, the Bank recorded
initial provisions for credit losses on non-impaired loans acquired from CWB
of $230 million ($166 million net of income taxes).
(millions of Canadian dollars) Six months ended April 30
2025((1)) 2024((2))
Personal and Commercial Wealth Management Financial Markets USSF&I Other
Total Total
Operating results
Net interest income 2,090 457 (1,014) 726 (82) 2,177 1,386
Non-interest income 530 1,110 3,022 69 (75) 4,656 4,074
Total revenues 2,620 1,567 2,008 795 (157) 6,833 5,460
Non-interest expenses 1,445 917 770 240 216 3,588 2,921
Income before provisions for credit losses and income taxes 1,175 650 1,238 555 (373) 3,245 2,539
Provisions for credit losses 588 1 100 110 − 799 258
Income before income taxes (recovery) 587 649 1,138 445 (373) 2,446 2,281
Income taxes (recovery) 165 175 220 93 (100) 553 453
Net income 422 474 918 352 (273) 1,893 1,828
Items that have an impact on results
Net interest income
Amortization of the subscription receipt issuance costs((3)) − − − − (28) (28) −
Impact on net interest income − − − − (28) (28) −
Non-interest income
Gain on the fair value remeasurement of an equity interest((4)) − − − − 4 4 −
Management of the fair value changes related to the CWB acquisition((5)) − − − − (23) (23) −
Impact on non-interest income − − − − (19) (19) −
Non-interest expenses
CWB acquisition and integration charges((6)) 1 3 − − 140 144 −
Amortization of intangible assets related to the CWB acquisition((7)) 23 1 − − − 24 −
Impact on non-interest expenses 24 4 − − 140 168 −
Provisions for credit losses
Initial provisions for credit losses on non-impaired loans acquired from 230 − − − − 230 −
CWB((8))
Impact on provisions for credit losses 230 − − − − 230 −
Income taxes
Income taxes on the amortization of the subscription receipt issuance − − − − (8) (8) −
costs((3))
Income taxes on the gain on the fair value remeasurement − − − − 1 1 −
of an equity interest((4))
Income taxes on management of the fair value changes related to the − − − − (6) (6) −
CWB acquisition((5))
Income taxes on the CWB acquisition and integration charges((6)) − (1) − − (38) (39) −
Income taxes on the amortization of intangible assets related to the (6) − − − − (6) −
CWB acquisition((7))
Income taxes on initial provisions for credit losses on non- (64) − − − − (64) −
impaired loans acquired from CWB((8))
Impact on income taxes (70) (1) − − (51) (122) −
Impact on net income (184) (3) − − (136) (323) −
Operating results - Adjusted
Net interest income - Adjusted 2,090 457 (1,014) 726 (54) 2,205 1,386
Non-interest income - Adjusted 530 1,110 3,022 69 (56) 4,675 4,074
Total revenues - Adjusted 2,620 1,567 2,008 795 (110) 6,880 5,460
Non-interest expenses - Adjusted 1,421 913 770 240 76 3,420 2,921
Income before provisions for credit losses and income taxes - Adjusted 1,199 654 1,238 555 (186) 3,460 2,539
Provisions for credit losses - Adjusted 358 1 100 110 − 569 258
Income before income taxes (recovery) - Adjusted 841 653 1,138 445 (186) 2,891 2,281
Income taxes (recovery) - Adjusted 235 176 220 93 (49) 675 453
Net income - Adjusted 606 477 918 352 (137) 2,216 1,828
(1) On February 3, 2025, the Bank completed the acquisition of
CWB. CWB's results were consolidated from the closing date, which impacted the
results, balances and ratios for the six-month period ended April 30, 2025.
For additional information on the impact of the CWB acquisition, see the
Acquisition section in the Report to Shareholders - Second quarter of 2025,
which is available on the Bank's website at nbc.ca or the SEDAR+ website at
sedarplus.ca.
(2) Certain amounts have been adjusted to reflect the
discontinuation of taxable equivalent basis reporting for revenues and income
taxes.
(3) During the six-month period ended April 30, 2025, the Bank
recorded an amount of $28 million ($20 million net of income taxes) to reflect
the amortization of the issuance costs of the subscription receipts issued as
part of the agreement to acquire CWB (for additional information, see Notes 8
and 10 to the unaudited interim condensed Consolidated Financial Statements in
the Report to Shareholders - Second quarter of 2025, which is available on the
Bank's website at nbc.ca or the SEDAR+ website at sedarplus.ca).
(4) During the six-month period ended April 30, 2025, the Bank
recorded a gain of $4 million ($3 million net of income taxes) upon the
remeasurement at fair value of the interest already held in CWB as at January
31, 2025.
(5) During the six-month period ended April 30, 2025, the Bank
recorded a mark-to-market loss of $23 million ($17 million net of income
taxes) on interest rate swaps used to manage the fair value changes of CWB's
assets and liabilities that resulted in volatility of goodwill and capital on
closing of the transaction.
(6) During the six-month period ended April 30, 2025, the Bank
recorded acquisition and integration charges of $144 million ($105 million net
of income taxes) related to the CWB transaction.
(7) During the six-month period ended April 30, 2025, the Bank
recorded an amount of $24 million ($18 million net of income taxes) to reflect
the amortization of intangible assets related to the CWB acquisition.
(8) During the six-month period ended April 30, 2025, the Bank
recorded initial provisions for credit losses on non-impaired loans acquired
from CWB of $230 million ($166 million net of income taxes).
Presentation of Basic and Diluted Earnings Per Share - Adjusted
(Canadian dollars) Quarter ended April 30 Six months ended April 30
2025((1)) 2024 % Change 2025((1)) 2024 % Change
Basic earnings per share $ 2.19 $ 2.56 (14) $ 4.96 $ 5.18 (4)
Amortization of the subscription receipt issuance costs((2)) − − 0.05 −
Gain on the fair value remeasurement of an equity interest((3)) − − (0.01) −
Management of the fair value changes related to the CWB acquisition((4)) − − 0.05 −
CWB acquisition and integration charges((5)) 0.22 − 0.29 −
Amortization of intangible assets related to the CWB acquisition((6)) 0.04 − 0.05 −
Initial provisions for credit losses on non-impaired loans acquired from 0.43 − 0.45 −
CWB((7))
Basic earnings per share - Adjusted $ 2.88 $ 2.56 13 $ 5.84 $ 5.18 13
Diluted earnings per share $ 2.17 $ 2.54 (15) $ 4.91 $ 5.13 (4)
Amortization of the subscription receipt issuance costs((2)) − − 0.05 −
Gain on the fair value remeasurement of an equity interest((3)) − − (0.01) −
Management of the fair value changes related to the CWB acquisition((4)) − − 0.05 −
CWB acquisition and integration charges((5)) 0.22 − 0.28 −
Amortization of intangible assets related to the CWB acquisition((6)) 0.04 − 0.05 −
Initial provisions for credit losses on non-impaired loans acquired from 0.42 − 0.45 −
CWB((7))
Diluted earnings per share - Adjusted $ 2.85 $ 2.54 12 $ 5.78 $ 5.13 13
(1) On February 3, 2025, the Bank completed the acquisition of
CWB. CWB's results were consolidated from the closing date, which impacted the
results, balances and ratios for the quarter and the six-month period ended
April 30, 2025. For additional information on the impact of the CWB
acquisition, see the Acquisition section in the Report to Shareholders -
Second quarter of 2025, which is available on the Bank's website at nbc.ca or
the SEDAR+ website at sedarplus.ca.
(2) During the six-month period ended April 30, 2025, the Bank
recorded an amount of $28 million ($20 million net of income taxes) to reflect
the amortization of the issuance costs of the subscription receipts issued as
part of the agreement to acquire CWB (for additional information, see Notes 8
and 10 to the unaudited interim condensed Consolidated Financial Statements in
the Report to Shareholders - Second quarter of 2025, which is available on the
Bank's website at nbc.ca or the SEDAR+ website at sedarplus.ca).
(3) During the six-month period ended April 30, 2025, the Bank
recorded a gain of $4 million ($3 million net of income taxes) upon the
remeasurement at fair value of the interest already held in CWB as at January
31, 2025.
(4) During the six-month period ended April 30, 2025, the Bank
recorded a mark-to-market loss of $23 million ($17 million net of income
taxes) on interest rate swaps used to manage the fair value changes of CWB's
assets and liabilities that resulted in volatility of goodwill and capital on
closing of the transaction.
(5) During the quarter ended April 30, 2025, the Bank recorded
acquisition and integration charges of $118 million ($86 million net of income
taxes) related to the CWB transaction. For the six-month period ended
April 30, 2025, these charges were $144 million ($105 million net of income
taxes).
(6) During the quarter and the six-month period ended April 30,
2025, the Bank recorded an amount of $24 million ($18 million net of income
taxes) to reflect the amortization of intangible assets related to the CWB
acquisition.
(7) During the quarter and the six-month period ended April 30,
2025, the Bank recorded initial provisions for credit losses on non-impaired
loans acquired from CWB of $230 million ($166 million net of income taxes).
Highlights
(millions of Canadian dollars, except per share amounts) Quarter ended April 30 Six months ended April 30
2025((1)) 2024((2)) % Change 2025((1)) 2024((2)) % Change
Operating results
Total revenues 3,650 2,750 33 6,833 5,460 25
Income before provisions for credit losses and income taxes 1,708 1,278 34 3,245 2,539 28
Net income 896 906 (1) 1,893 1,828 4
Return on common shareholders' equity((3)) 11.9 % 16.9 % 14.0 % 17.0 %
Operating leverage((3)) 0.8 % 4.3 % 2.3 % 2.9 %
Efficiency ratio((3)) 53.2 % 53.5 % 52.5 % 53.5 %
Earnings per share
Basic $ 2.19 $ 2.56 (14) $ 4.96 $ 5.18 (4)
Diluted $ 2.17 $ 2.54 (15) $ 4.91 $ 5.13 (4)
Operating results - Adjusted((4))
Total revenues - Adjusted((4)) 3,650 2,750 33 6,880 5,460 26
Income before provisions for credit losses 1,850 1,278 45 3,460 2,539 36
and income taxes - Adjusted((4))
Net income - Adjusted((4)) 1,166 906 29 2,216 1,828 21
Return on common shareholders' equity - Adjusted((5)) 15.6 % 16.9 % 16.5 % 17.0 %
Operating leverage - Adjusted((5)) 10.4 % 4.3 % 8.9 % 2.9 %
Efficiency ratio - Adjusted((5)) 49.3 % 53.5 % 49.7 % 53.5 %
Diluted earnings per share - Adjusted((4)) $ 2.85 $ 2.54 12 $ 5.78 $ 5.13 13
Common share information
Dividends declared $ 1.14 $ 1.06 8 $ 2.28 $ 2.12 8
Book value((3)) $ 76.13 $ 62.28 $ 76.13 $ 62.28
Share price
High $ 127.44 $ 114.68 $ 140.76 $ 114.68
Low $ 107.01 $ 101.24 $ 107.01 $ 86.50
Close $ 121.08 $ 110.54 $ 121.08 $ 110.54
Number of common shares (thousands) 391,322 340,056 391,322 340,056
Market capitalization 47,381 37,590 47,381 37,590
(millions of Canadian dollars) As at As at % Change
April 30, October 31,
2025((1)) 2024
Balance sheet and off-balance-sheet
Total assets 536,194 462,226 16
Loans, net of allowances 285,728 243,032 18
Deposits 387,974 333,545 16
Equity attributable to common shareholders 29,790 22,400 33
Assets under administration((3)) 825,523 766,082 8
Assets under management((3)) 170,469 155,900 9
Regulatory ratios under Basel III((6))
Capital ratios
Common Equity Tier 1 (CET1) 13.4 % 13.7 %
Tier 1 15.1 % 15.9 %
Total 16.9 % 17.0 % ( )
Leverage ratio 4.7 % 4.4 % ( )
TLAC ratio((6)) 28.2 % 31.2 % ( )
TLAC leverage ratio((6)) 8.8 % 8.6 % ( )
Liquidity coverage ratio (LCR)((6)) 166 % 150 % ( )
Net stable funding ratio (NSFR)((6)) 127 % 122 %
Other information ( )
Number of employees - Worldwide (full-time equivalent) 32,371 29,196 11
Number of branches in Canada 395 368 7
Number of banking machines in Canada 965 940 3
(1) On February 3, 2025, the Bank completed the acquisition of
CWB. CWB's results were consolidated from the closing date, which impacted the
results, balances and ratios for the quarter and the six-month period ended
April 30, 2025. For additional information on the impact of the CWB
acquisition, see the Acquisition section in the Report to Shareholders -
Second quarter of 2025, which is available on the Bank's website at nbc.ca or
the SEDAR+ website at sedarplus.ca.
(2) Certain amounts have been adjusted to reflect the
discontinuation of taxable equivalent basis reporting for revenues and income
taxes.
(3) For details on the composition of these measures, see the
Glossary section on pages 51 to 54 in the Report to Shareholders - Second
Quarter 2025, which is available on the Bank's website at nbc.ca or the SEDAR+
website at sedarplus.ca.
(4) See the Financial Reporting Method section on pages 4 to 7 for
additional information on non-GAAP financial measures.
(5) For additional information on non-GAAP ratios, see the
Financial Reporting Method section on pages 6 to 12 in the Report to
Shareholders - Second Quarter 2025, which is available on the Bank's website
at nbc.ca or the SEDAR+ website at sedarplus.ca.
(6) For additional information on capital management measures, see
the Financial Reporting Method section on pages 6 to 12 in the Report to
Shareholders - Second Quarter 2025, which is available on the Bank's website
at nbc.ca or the SEDAR+ website at sedarplus.ca.
Caution Regarding Forward-Looking Statements
Certain statements in this document are forward-looking statements. These
statements are made in accordance with applicable securities legislation in
Canada and the United States. The forward-looking statements in this document
may include, but are not limited to, statements in the messages from
management, as well as other statements about the economy, market changes, the
Bank's objectives, outlook, and priorities for fiscal 2025 and beyond, the
strategies or actions that the Bank will take to achieve them, expectations
for the Bank's financial condition and operations, the regulatory environment
in which it operates, the potential impacts of increased geopolitical
uncertainty on the Bank and its clients, its environmental, social, and
governance targets and commitments, the impacts and benefits of the
acquisition of Canadian Western Bank (CWB), and certain risks to which the
Bank is exposed. The Bank may also make forward-looking statements in other
documents and regulatory filings, as well as orally. These forward-looking
statements are typically identified by verbs or words such as "outlook",
"believe", "foresee", "forecast", "anticipate", "estimate", "project",
"expect", "intend" and "plan", the use of future or conditional forms, notably
verbs such as "will", "may", "should", "could" or "would", as well as similar
terms and expressions.
These forward-looking statements are intended to assist the security holders
of the Bank in understanding the Bank's financial position and results of
operations as at the dates indicated and for the periods then ended, as well
as the Bank's vision, strategic objectives, and performance targets, and may
not be appropriate for other purposes. These forward-looking statements are
based on current expectations, estimates, assumptions and intentions that the
Bank deems reasonable as at the date thereof and are subject to inherent
uncertainty and risks, many of which are beyond the Bank's control. There is a
strong possibility that the Bank's express or implied predictions, forecasts,
projections, expectations, or conclusions will not prove to be accurate, that
its assumptions will not be confirmed, and that its vision, strategic
objectives, and performance targets will not be achieved. The Bank cautions
investors that these forward-looking statements are not guarantees of future
performance and that actual events or results may differ materially from these
statements due to a number of factors. Therefore, the Bank recommends that
readers not place undue reliance on these forward-looking statements, as a
number of factors could cause actual results to differ materially from the
expectations, estimates, or intentions expressed in these forward-looking
statements. Investors and others who rely on the Bank's forward-looking
statements should carefully consider the factors listed below as well as other
uncertainties and potential events and the risks they entail. Except as
required by law, the Bank does not undertake to update any forward-looking
statements, whether written or oral, that may be made from time to time, by it
or on its behalf.
Assumptions about the performance of the Canadian and U.S. economies in 2025,
in particular in the context of increased geopolitical uncertainty, and how
that performance will affect the Bank's business are among the factors
considered in setting the Bank's strategic priorities and objectives,
including allowances for credit losses. These assumptions appear in the 2024
Annual Report in the Economic Review and Outlook section and, for each
business segment, in the Economic and Market Review sections of the 2024
Annual Report and the Economic Review and Outlook section of the Report to
Shareholders for the second quarter of 2025 and may be updated in the
quarterly reports to shareholders filed thereafter.
The forward-looking statements made in this document are based on a number of
assumptions and their future outcome is subject to a variety of risk factors,
many of which are beyond the Bank's control and the impacts of which are
difficult to predict. These risk factors include, among others, the general
economic environment and business and financial market conditions in Canada,
the United States, and the other countries where the Bank operates, including
recession risk; geopolitical and sociopolitical uncertainty; the measures
affecting trade relations between Canada and its partners, including the
imposition of tariffs and any measures taken in response to such tariffs, as
well as the possible impacts on our clients, our operations and, more
generally, the economy; exchange rate and interest rate fluctuations;
inflation; global supply chain disruptions; higher funding costs and greater
market volatility; changes to fiscal, monetary, and other public policies;
regulatory oversight and changes to regulations that affect the Bank's
business; the Bank's ability to successfully integrate CWB and the undisclosed
costs or liability associated with the acquisition; climate change, including
physical risks and risks related to the transition to a low-carbon economy;
the Bank's ability to meet stakeholder expectations on environmental and
social issues, the need for active and continued stakeholder engagement; the
availability of comprehensive and high-quality information from customers and
other third parties, including greenhouse gas emissions; the ability of the
Bank to develop indicators to effectively monitor progress; the development
and deployment of new technologies and sustainable products; the ability of
the Bank to identify climate-related opportunities as well as to assess and
manage climate-related risks; significant changes in consumer behaviour; the
housing situation, real estate market, and household indebtedness in Canada;
the Bank's ability to achieve its key short-term priorities and long-term
strategies; the timely development and launch of new products and services;
the ability of the Bank to recruit and retain key personnel; technological
innovation, including open banking and the use of artificial intelligence;
heightened competition from established companies and from competitors
offering non-traditional services; model risk; changes in the performance and
creditworthiness of the Bank's clients and counterparties; the Bank's exposure
to significant regulatory issues or litigation; changes made to the accounting
policies used by the Bank to report its financial position, including the
uncertainty related to assumptions and significant accounting estimates;
changes to tax legislation in the countries where the Bank operates; changes
to capital and liquidity guidelines as well as to the instructions related to
the presentation and interpretation thereof; changes to the credit ratings
assigned to the Bank by financial and extra-financial rating agencies;
potential disruptions to key suppliers of goods and services to the Bank;
third-party risk, including failure by third parties to fulfil their
obligations to the Bank; the potential impacts of disruptions to the Bank's
information technology systems due to cyberattacks and theft or disclosure of
data, including personal information and identity theft; the risk of
fraudulent activity; and possible impacts of major events on the economy,
market conditions, or the Bank's outlook, including international conflicts,
natural disasters, public health crises, and the measures taken in response to
these events; and the ability of the Bank to anticipate and successfully
manage risks arising from all of the foregoing factors.
The foregoing list of risk factors is not exhaustive, and the forward-looking
statements made in this document are also subject to credit risk, market risk,
liquidity and funding risk, operational risk, regulatory compliance risk,
reputation risk, strategic risk, and social and environmental risk as well as
certain emerging risks or risks deemed significant. Additional information
about these factors is provided in the Risk Management section of the
2024 Annual Report as well as in the Risk Management section of the Report to
Shareholders for the second quarter of 2025 and may be updated in the
quarterly reports to shareholders filed thereafter.
Disclosure of the Second Quarter 2025 Results
Conference Call
- A conference call for analysts and institutional investors
will be held on Wednesday, May 28, 2025 at 11:00 a.m. EDT.
- Access by telephone in listen-only mode: 1-800-806-5484 or
416-340-2217. The access code is 4131060#.
- A recording of the conference call can be heard until August
28, 2025 by dialing 1-800-408-3053 or 905-694-9451. The access code is
8760078#.
Webcast
- The conference call will be webcast live at
nbc.ca/investorrelations
(https://www.nbc.ca/en/about-us/investors/investor-relations.html) .
- A recording of the webcast will also be available on National
Bank's website after the call.
Financial Documents
- The Report to Shareholders (which includes the quarterly
Consolidated Financial Statements) is available at all times on National
Bank's website at nbc.ca/investorrelations
(https://www.nbc.ca/en/about-us/investors/investor-relations.html) .
- The Report to Shareholders, the Supplementary Financial
Information, the Supplementary Regulatory Capital and Pillar 3 Disclosure, and
a slide presentation will be available on the Investor Relations page of
National Bank's website on the morning of the day of the conference call.
For more information
- Marianne Ratté, Vice-President and Head - Investor Relations,
investorrelations@nbc.ca
- Jean-François Cadieux, Assistant Vice-President, Public
Affairs, jean-francois.cadieux@nbc.ca (mailto:jean-francois.cadieux@nbc.ca)
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