National Bank of Canada Earnings - Q3 2025 Analysis & Highlights
Key Takeaways
National Bank of Canada's Q3 2025 earnings call highlighted strong revenue fundamentals, cost and funding synergies from the CWB integration, and solid credit performance. The bank reported earnings per share of CAD 2.68 and a return on equity of 14%. Management discussed the Canadian and US economies, the CWB integration, and performance across various business segments. They also announced a share repurchase program and discussed capital allocation plans.
Key Financial Results
Earnings per share (EPS) for Q3 2025 were CAD 2.68.
Return on equity (ROE) for Q3 2025 was 14%.
The CET1 ratio ended the quarter at 13.9%.
Revenue increased 19% year-over-year.
PTPP rose 21%.
Business Segment Results
P&C Banking generated net income of CAD 386 million, including CAD 74 million from the CWB transaction.
Excluding CWB, P&C Banking revenues were up 2% year-over-year.
Commercial loan book grew 13% year-over-year.
Personal mortgages grew 5% year-over-year.
Wealth Management net income grew 13% year-over-year.
Financial Markets net income grew 5% year-over-year.
Corporate and investment banking delivered record revenues of CAD 408 million.
Global Markets revenues grew 3% year-over-year.
Credigy delivered net income of CAD 43 million, up 2% year-over-year.
At ABA Bank, net income increased by 16% year-over-year.
ABA Bank deposits were up 21% and loans were up 8%.
Capital Allocation
The company announced its intention to repurchase up to 8 million shares.
The decision to buy back shares does not factor in benefits from CWB's AIRB conversion.
The dividend will be reviewed next quarter.
Industry Trends and Dynamics
The Canadian economy has shown some resilience but has been strained by tariff uncertainty, resulting in job losses in certain industries and an overall softer labor market.
Investments in energy, security, and nation-building infrastructure will stimulate growth.
Competitive Landscape
The market remains competitive for Credigy, but more deal flow and opportunities are emerging.
Macroeconomic Environment
The USMCA trade agreement has been an effective safeguard for Canada.
The full impact of tariffs is still unfolding and will continue to shape business confidence and investments.
The path of inflation and long-term rates remains uncertain due to tariffs and growing government deficits.
Geopolitics and geo-economics remain a source of instability.
A trade deal between the US and Cambodia will keep the local economy competitive and set the stage for continued growth for ABA Bank.
Growth Opportunities and Strategies
Focus on organic growth across all business segments.
Integration of CWB is progressing with funding and cost synergies.
Client migrations onto the National Bank platform have begun.
Revenue synergies from the CWB integration will be discussed in more detail on the Q4 call.
Financial Guidance and Outlook
Excluding the amortization of the fair value mark, full-year EPS growth is expected to be a bit higher than the mid-single-digit range.
Full-year ROE is anticipated to be around 15%.
Impaired PCL is expected to end up around the middle of the 25 basis points to 35 basis points range for the full year.
The capital benefit from the conversion to the advanced method is expected to be realized towards the end of 2026.
Achieving year one target of CAD 135 million in December 2025 for synergies.
