National Bank of Canada (NTIOF) Q1 2026 Earnings Call Highlights: Strong EPS Growth and …

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Thu, February 26, 2026 at 8:01 AM GMT+9 3 min read

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**EPS:** $3.25, representing an 11% year-over-year increase.

**Return on Equity (ROE):** 16.6%.

**CET1 Ratio:** 13.7%.

**Revenue:** Increased 21% year over year.

**Net Income (PNC Banking):** $442 million.

**Net Income (Wealth Management):** $274 million, up 13% year over year.

**Net Income (Capital Markets):** $443 million, up 6% year over year.

**Net Income (Credigy):** $47 million.

**Net Income (EBITDA Bank):** Increased 9% year over year.

**Asset Under Administration:** Grew 3% sequentially to close to $900 billion.

**Loans:** Rose 23% year over year, or 9% excluding CWB.

**Deposits:** Increased $5 billion or 2% sequentially.

**Operating Leverage:** Positive at 2%.

**Expenses:** Up 10.2%, driven by higher variable compensation.

**Net Interest Income (excluding trading):** Grew 5% sequentially.

**Share Buybacks:** Repurchased 6.4 million shares under the program.

**Provisions for Credit Losses (PCLs):** $244 million or 32 basis points.

**Gross Impaired Loan Ratio:** 111 basis points.

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Release Date: February 25, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

National Bank of Canada (NTIOF) reported a strong EPS growth of 11% year over year, reaching $3.25.

The bank achieved a return on equity of 16.6% and maintained a solid CET1 ratio of 13.7%.

Wealth management segment saw a 13% increase in net income year over year, supported by strong growth in fee-based and transaction revenues.

Capital markets generated a 6% increase in net income year over year, driven by strong contributions from both trading and non-trading businesses.

The bank is ahead of schedule in realizing cost and funding synergies from the CWB transaction, exceeding the year one target.

Negative Points

Geopolitical and economic uncertainties, including trade tensions and Kuzma uncertainty, are affecting the country's economic outlook.

Business investment has slowed down, impacting the bank's growth potential.

The PNC segment's ROE is lower compared to peers, indicating room for improvement.

There is a higher attrition rate in the CWB deposit books, which were built around higher rate offerings.

The bank's market risk RWA showed a 10% quarter-over-quarter increase, indicating potential volatility.

Q & A Highlights

Q: Canadian PNC’s ROE appears lower than peers at 13%. What opportunities exist to improve this? A: Laurent Ferreira, President and CEO, acknowledged the lower ROE and mentioned a strategic review is underway. They see upside potential but it’s too early to provide specific outcomes or magnitude.

Story Continues  

Q: Can you elaborate on the new ROE guidance for 2026 and what has changed operationally to support this? A: Marie Gingras, CFO, explained the increase in the 2026 ROE target from 15% to 16% is due to strong Q1 performance, disciplined execution of CWB synergies, and active share buybacks. For 2027, they anticipate organic earnings growth and revenue synergies contributing to a 17% plus ROE.

Q: With the competitive market and pricing conditions, can we expect lower volume growth in Credigy? A: Etienne Dubuc, EVP, Capital Markets, noted strong deal flow in Q1 but expects slower deal activity in Q2 due to competitive markets. However, they anticipate full-year growth within the 5-10% target range, with stable and attractive margins.

Q: How is the integration of CWB progressing, particularly in terms of revenue synergies? A: Julie Levesque, EVP, Personal Banking, stated they are seeing early gains in capital markets and expect NII synergies to materialize in the second half of 2026. They are on track to reach the $50 million target for 2026, with positive momentum in the field.

Q: Regarding the ROE waterfall for 2027, why is there no improvement in PCLs factored in? A: Jean-Sebastien Grise, Chief Risk Officer, clarified that they are maintaining a prudent approach with a 25-35 basis point target for PCLs, consistent with 2026 guidance, and have not included any credit improvement in the 2027 ROE projections.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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