National Bank of Canada (NA) Q2 2025 earnings summary

Executive summary

• Q2 2025 reported net income of $896 million (down 1% YoY), adjusted net income up 29% to $1,166 million, and adjusted EPS up 12% to $2.85, reflecting strong organic growth and significant contribution from the Canadian Western Bank (CWB) acquisition.

• ROE was 11.9% reported and 15.6% adjusted; quarterly dividend increased by $0.04 to $1.18 per share for Q3 2025.

• CWB integration is ahead of schedule, with realized cost and funding synergies and client migration beginning in the summer.

• Macroeconomic uncertainty persists due to global trade tensions, fiscal deficits, and a softening Canadian labor market, but Canadian consumers and businesses remain resilient.

Financial highlights

• Total revenues for Q2 2025 were $3,650 million, up 33% year-over-year; adjusted pre-tax pre-provision earnings up 45% YoY; CWB contributed $298 million to revenue and $223 million to expenses.

• Net income was $896 million reported and $1,166 million adjusted; reported diluted EPS down 15% YoY, adjusted EPS up 12% YoY.

• CET1 capital ratio at 13.4% post-CWB acquisition, supporting business growth and dividend increase.

• Provisions for credit losses (PCL) reported at $545 million (79 bps), including a $230 million initial CWB provision; adjusted PCL at $315 million (45 bps).

• Efficiency ratio for Q2 2025 was 53.2%, improving to 49.3% on an adjusted basis.

Outlook and guidance

• Management expects mid-single-digit adjusted EPS growth and ~15% adjusted ROE for FY 2025, with positive operating leverage.

• Revenue synergies from CWB expected to accelerate in 2026, with full benefits in 2027 and beyond.

• CET1 ratio expected to remain strong, with further capital optimization as CWB’s RWA transitions to AIRB methodology.

• Trading performance expected to normalize but remain solid; corporate and investment banking pipeline remains strong.

• Macroeconomic outlook remains cautious due to geopolitical uncertainty, trade tensions, and a softening Canadian labor market.