National Bank of Canada delivered exceptional second-quarter results, beating analyst expectations with net income of $1.23 billion, representing a 38% increase from $896 million in the same period last year. According to reports from Bloomberg, the bank's adjusted net income reached $3.23 per share, surpassing the analyst forecast of $3.14, with adjusted earnings per share of $3.23 demonstrating strong operational performance across its business segments. The bank also reported adjusted revenue of $3.91 billion against expectations of $3.81 billion, demonstrating robust operational performance.
The bank's provisions for credit loss (PCLs) decreased significantly to $233 million, less than half of the $545 million recorded in the previous year, as reported by Bloomberg. National Bank increased its dividend by eight cents to $1.32 per share for the second quarter of 2026, representing a 6.5% increase from the previous quarter. Chief Executive Laurent Ferreira attributed the strong performance to credit discipline, Canadian Western Bank-related synergies, and share buybacks. The bank's CET1 ratio edged down 10 basis points to 13.5% following share repurchases, reflecting the impact of its capital management strategy.
The bank's personal and commercial banking unit grew nearly 169% to $355 million, benefiting from net interest income and the acquisition of Canadian Western Bank, though this fell short of analyst expectations of $392 million. As reported by Bloomberg, the wealth management unit's net income increased 18% to $274 million, primarily driven by growth in fee-based revenue. The capital markets division posted net income of $488 million, down 3% from a year ago but exceeding analyst predictions of $443 million. Chief Financial Officer Marie Chantal Gingras indicated the bank expects "a slight decline" on personal and commercial banking interest margins next quarter due to "mixed dynamics in commercial deposits."
National Bank's strong quarterly results contributed to a 3% decline in share price in Toronto trading, marking the bank's biggest intraday drop since August, as reported by Bloomberg. Bank of Nova Scotia analyst Mike Rizvanovic noted that "despite a decent quarter, we believe NA's shares price could see modest selling pressure at the open given the bank's group-high valuation multiple heading into Q2 earnings season." This contrasted with the positive market response to other major Canadian banks, with BMO shares rising 1.2% and Scotiabank remaining flat following their respective earnings announcements. The bank's performance was part of a broader trend where all three major Canadian banks - BMO, Scotiabank, and National Bank - topped analyst expectations in their second-quarter results, with each bank raising its quarterly dividend.
