National Bank of Canada (NA) Q2 2025 earnings summary

Executive summary

• Q2 2025 adjusted net income rose 29% to $1,166 million and adjusted EPS increased 12% to $2.85, driven by strong segment growth and the Canadian Western Bank (CWB) acquisition, despite reported net income of $896 million, down 1% year-over-year.

• The CWB acquisition, completed February 3, 2025, expanded the national footprint, contributed to revenue and asset growth, and integration is ahead of schedule with early cost and funding synergies.

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

• Strong organic growth across business segments, with Financial Markets and Wealth Management outperforming.

• 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 profit rose 45% to $1,850 million.

• CWB contributed $298 million to revenues and $223 million to expenses in Q2.

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

• Efficiency ratio was 53.2% (Q2 2025); adjusted efficiency ratio improved to 49.3%.

• CET1 capital ratio stood at 13.4% as of April 30, 2025, down from 13.7% at October 31, 2024.

Outlook and guidance

• Management expects continued organic growth across business segments, supported by a strong capital position and CWB integration.

• FY 2025 adjusted EPS expected to grow mid-single digits, with adjusted ROE outlook around 15%.

• Positive operating leverage targeted for 2025; revenue synergies from CWB expected to accelerate in 2026, with full benefits in 2027 and beyond.

• Trading performance expected to normalize in the second half, but year-over-year growth anticipated.

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