National Bank of Canada reported third-quarter 2026 earnings that exceeded analyst estimates, driven by broad-based revenue growth across its business segments. The Montreal-based lender posted earnings per share of CAD 3.39, up 26% year-over-year and surpassing the CAD 3.18 consensus forecast by 6.6%. Revenue totaled CAD 4.05 billion, an 18% increase from the prior year and ahead of the CAD 3.86 billion estimate by 4.9%.
The bank’s return on equity reached 16.8% for the quarter, bringing its year-to-date figure to 16.7%. This performance puts National Bank on track to surpass its 16% ROE target for fiscal 2026, with management guiding toward more than 17% ROE by 2027. Its common equity tier 1 (CET1) ratio strengthened to 13.51%, supported by 41 basis points of capital generation during the period.
Net interest income, excluding trading, rose 7% sequentially, while the all-bank net interest margin edged up 2 basis points to 2.18%. Operating leverage remained positive at 5.8%, though operating expenses increased 11.7% year-over-year, excluding variable compensation and litigation costs. Total provisions for credit losses were stable at CAD 246 million, or 31 basis points, with impaired loan provisions at CAD 224 million.
Segment performance showed broad strength. Personal and commercial banking net income rose 13% year-over-year, with personal mortgages up 14% and commercial deposits increasing 12%. Wealth management net income grew 22%, while capital markets net income surged 32%, supported by a 13% rise in corporate and investment banking revenue. Credigy reported net income of CAD 39 million, with revenue up 13% year-over-year.
Management highlighted ongoing integration efforts following the acquisition of Canadian Western Bank, though the Advanced Internal Ratings-Based (AIRB) framework conversion for the acquired portfolio has been deferred to late 2027. The bank has captured CAD 238 million in cost and funding synergies to date, remaining on track to reach CAD 270 million by fiscal 2026, with revenue synergies of CAD 52 million already achieved ahead of schedule.
National Bank also noted progress toward the acquisition of Laurentian Bank’s retail and SME banking portfolios, expected to close by late 2026. The bank repurchased 2.3 million shares in the quarter under its normal course issuer bid, using 26 basis points of CET1 capacity, and plans to launch a new buyback program subject to regulatory approval upon completion of the current program in September 2026.
Shares of National Bank fell 5.15% in pre-market trading to CAD 211.07, following the release, despite the earnings beat. The stock remains above its 52-week low of CAD 141.46 and below its 52-week high of CAD 237.13.
