National Bank of Canada

First-quarter 2026 adjusted EPS was $3.25, up 11% year over year. Revenues rose 21% year over year and PTPP grew 23%; excluding CWB, revenues increased 11% and PTPP rose 12%. The bank reported ROE of 16.6% and a CET1 ratio of 13.74%. P&C Banking delivered more than $1.5 billion of revenue and $442 million of net income; Wealth Management net income rose 13% year over year to $274 million; Capital Markets net income was $443 million, up 6% year over year; Credigy net income was $47 million; ABA Bank net income increased 9% year over year. On credit, total PCLs were $244 million or 32 bps, and impaired PCLs were $215 million or 28 bps, stable sequentially. Looking ahead, management said P&C NIM should remain relatively stable next quarter, full-year impaired PCLs should stay in the 25 to 35 bps range, 2026 EPS growth is now expected at the top end of the 5% to 10% outlook, and 2026 ROE is expected to be around 16%.

Laurent Ferreira framed the quarter as evidence that the CWB deal and the core businesses are both contributing, highlighting strong retail and business segment performance, share repurchases, and cost/funding synergies. He also sounded constructive on strategic capital deployment, saying the bank will prioritize organic growth, efficiency, dividends, buybacks, and selective tuck-in deals, while still targeting a CET1 ratio converging toward 13% by end-2027. His tone was confident but measured, especially on the macro backdrop, which he described as weighed down by trade uncertainty and weak GDP growth.

Marie Chantal Gingras emphasized that revenues rose 21% year over year, PTPP rose 23%, and operating leverage was positive at 2%, with CWB contributing meaningfully. She noted expenses were up 10.2%, mainly from variable compensation, and that net interest income excluding trading grew 5% sequentially; P&C margin expanded 2 bps sequentially, while next-quarter P&C NIM is expected to stay relatively stable. On capital, she said CET1 ended at 13.74%, capital generation was 41 bps, buybacks reduced CET1 by 33 bps, and the bank has already repurchased 6.4 million shares, or 80% of the current NCIB. She also said $176 million of cost and funding synergies have been realized to date, ahead of the $135 million year-1 target, with $270 million still expected by fiscal 2026 and $50 million of revenue synergies targeted by year-end.

Analysts focused heavily on the new ROE framework, asking why Canadian P&C ROE is below peers and what could lift it closer to industry levels. Management said the segment is 'subpar' versus peers and confirmed a strategic review is underway, but said it is too early to quantify the upside. Questions also probed the higher 2026/2027 ROE targets and the buyback assumption; management said the improved outlook reflects a strong start, synergy execution, active NCIB use, and a path to 13% CET1 by end-2027. Other questions covered Credigy’s slower near-term deal activity and margin effects from a large prepayment, which management said could make Q2 a bit slower but should still leave full-year growth in the 5% to 10% range. There was also discussion of credit, Quebec exposure, and FRTB/RWA volatility, with management saying PCL guidance remains 25 to 35 bps and that FRTB does not fully capture risk.