Published December 3, 2025
National Bank of Canada stock (TSX: NA, OTC: NTIOF) is trading just below record levels after the Montreal-based lender delivered a stronger‑than‑expected fourth quarter, raised its dividend and highlighted the earnings power of its wealth management and capital markets franchises.
As investors digest the results and fresh guidance, the key question is whether National Bank of Canada stock still offers upside in 2026 after a nearly 30% surge this year.
Key takeaways
- Q4 2025 beat: Adjusted profit rose to about C$1.16 billion, or C$2.82 per share, up from C$928 million (C$2.58) a year earlier, driven by 41% profit growth in capital markets and double‑digit revenue growth in wealth management. [1]
- Dividend hike: The quarterly common share dividend was increased by 6 cents to C$1.24, a 5.1% raise, implying a forward yield of roughly 2.9% at current prices. [2]
- Share price near highs: NA.TO closed around C$170.90 on the Toronto Stock Exchange on December 3 after trading between C$170.62 and C$175.99, just shy of recent record levels and up more than 20% over the past year. [3]
- Capital still strong: The bank’s CET1 capital ratio stands at 13.8% and its liquidity coverage ratio at 173%, comfortably above Canadian regulatory minimums. [4]
- Analyst view: Most analysts rate the stock Buy or Hold, but the average 12‑month price targets cluster in the C$150–C$165 range, slightly below today’s price, reflecting concerns about valuation after the 2025 rally. [5]
National Bank of Canada stock today: just off record highs
Based on TSX data compiled by StockAnalysis, National Bank of Canada shares traded on December 3, 2025 in a range of C$170.62 to C$175.99 and closed around C$170.90, a modest 0.1% dip from the prior day’s C$171.12 close. [6]
Over the past 52 weeks, the stock’s trading range has widened dramatically to roughly C$106.67–C$175.99, underscoring just how strong the recovery has been from early‑2025 levels. [7]
Data providers such as Investing.com and Perplexity Finance estimate that National Bank of Canada stock is up roughly 24–30% over the past year and around 29.5% since January 2025, outpacing the broader TSX Composite and broadly in line with gains across Canada’s Big Six banks, which Reuters recently pegged at about 32% year‑to‑date. [8]
That rally means investors are now paying somewhere in the neighborhood of 16–17 times trailing earnings and close to 2 times book value for NA shares, a premium to their own history and above the broader Canadian bank group. [9]
Q4 2025 results: wealth management and capital markets carry the quarter
Adjusted earnings beat expectations
For the quarter ended October 31, 2025, National Bank of Canada reported:
- Adjusted net income: about C$1.16 billion, up from C$928 million a year earlier.
- Adjusted diluted EPS:C$2.82, a 9% increase from C$2.58 in Q4 2024 and ahead of analyst expectations near C$2.62. [10]
On a reported basis (before adjustments for items such as acquisition‑related charges), the bank’s news release and several outlets note:
- Reported net income: roughly C$1.06 billion, up 11% from C$955 million a year earlier.
- Reported diluted EPS: about C$2.57 versus C$2.66 in the prior‑year quarter, reflecting acquisition and other specified items that depressed reported earnings but do not affect the stronger adjusted trend. [11]
U.S. wire reports covering the OTC listing NTIOF show net income of roughly C$763 million and EPS of C$1.85 under a slightly different reporting basis, highlighting how headline numbers can vary with currency translation and adjustments. [12]
Segment strength: fee income takes the lead
Reuters reports that the quarter’s outperformance was driven primarily by wealth management and capital markets: [13]
- Capital markets profit jumped 41% to C$432 million, helped by stronger trading and investment‑banking activity.
- Wealth management revenue rose 18% to about C$258 million, buoyed by higher assets under management and improved market conditions.
Those fee‑heavy, higher‑margin businesses offset softer loan growth in more traditional retail banking, which continues to face headwinds from:
- Uncertainty around U.S.–Canada trade relations.
- Concerns about consumer resilience as mortgage renewals roll through at higher interest rates. [14]
Provisions for credit losses increased, but remain manageable
The earnings beat came despite a notable increase in provisions for credit losses (PCL):
- National Bank recorded C$244 million in PCL in Q4 2025, up from C$162 million a year earlier. [15]
MarketWatch and Finimize note that higher provisions reflected:
- Increased impaired‑loan charges across personal, commercial and ABA Bank portfolios.
- A C$29 million build on performing (non‑impaired) loans as risk models were recalibrated and the loan book expanded, particularly after the Canadian Western Bank acquisition. [16]
While PCLs came in above some analyst estimates, they remain modest relative to earnings and capital, and are broadly consistent with what investors are seeing across other major Canadian lenders this quarter. [17]
Full‑year 2025 performance
Data from the annual report and analyst aggregators shows that for fiscal 2025 as a whole, National Bank of Canada delivered: [18]
- Adjusted EPS growth: about 8.6% year‑over‑year.
- Adjusted return on equity (ROE):15.3%, comfortably within management’s 15–20% medium‑term target.
- Dividend payout ratio (adjusted): roughly 40–41%, the lower half of the bank’s 40–50% target band.
Those metrics help explain why the board felt confident raising the dividend again despite a more uncertain macro backdrop.
Dividend hike and capital strength
Dividend increase and yield
National Bank’s board approved a 6‑cent increase to the quarterly common share dividend, lifting it from C$1.18 to C$1.24 per share, effective with the February 1, 2026 payment. [19]
At the current share price around C$171, that translates into:
- An annualized dividend of C$4.96 per share.
- A forward dividend yield near 2.9%. [20]
National Bank’s own annual report highlights a 10‑year adjusted dividend CAGR of roughly 8.6%, with a long‑run average payout ratio around 42% — suggesting the latest increase is consistent with its pattern of steady, sustainable dividend growth rather than a one‑off gesture. [21]
Capital and liquidity
Regulatory filings show that as of October 31, 2025, National Bank of Canada reported: [22]
- CET1 capital ratio:13.8%
- Liquidity coverage ratio (LCR):173%
That leaves a healthy buffer over the 11.5% CET1 requirement for Canada’s domestic systemically important banks (D‑SIBs) once the 3.5% Domestic Stability Buffer (DSB) is added to the minimum capital requirement. [23]
Canada’s banking regulator, OSFI, has recently reiterated that the Big Six banks – including National Bank – hold about C$70 billion in excess capital and is actively encouraging them to take “smart risks” by increasing lending to businesses, potentially supported by tweaks to capital rules. [24]
Taken together, the high CET1 ratio, robust liquidity, and a mid‑40s payout ratio suggest that National Bank can:
- Absorb moderate credit deterioration.
- Continue integrating its acquisitions.
- Maintain a path of gradual dividend growth if earnings continue to expand.
Strategy and M&A: from Quebec champion to national consolidator
Canadian Western Bank: 2025’s transformational deal
On February 3, 2025, National Bank completed its acquisition of Canadian Western Bank (CWB), a deal first announced in June 2024. [25]
Key features of the transaction:
- CWB shareholders received 0.45 NA shares per CWB share, valuing the deal at about C$5.3 billion in equity consideration and C$5.6 billion including shares already held by National Bank. [26]
- CWB’s common shares have since been delisted from the TSX. [27]
- Finimize and other commentators estimate that National Bank has now absorbed roughly C$45.4 billion in assets and C$37.7 billion in liabilities from CWB, significantly expanding its commercial banking footprint in Western Canada. [28]
Reuters and other outlets have underscored that, unlike some rivals who pursued U.S. expansion, National Bank has chosen to double down on Canada, with CWB viewed as a way to accelerate growth beyond its traditional Quebec stronghold. [29]
Laurentian Bank retail & SME portfolio: the next leg of consolidation
On December 2, 2025, Banking Dive reported a second major domestic move: National Bank will acquire Laurentian Bank’s retail presence and small‑business operations, in a complex three‑way transaction in which Fairstone Bank buys Laurentian itself. [30]
For National Bank, the deal is primarily about scale and deposits:
- It will add about C$7.6 billion in retail deposits and C$3.3 billion in retail loans.
- It will also take on roughly C$1.4 billion in SME loans and deposits and distribute mutual funds representing around C$3.4 billion in assets. [31]
- Once the deal closes, Laurentian’s Quebec branches will be shut, and employees will not be transferred en masse to National Bank, though affected staff can apply for open roles. [32]
The transaction is expected to be 1.5–2% accretive to National Bank’s EPS by 2027, according to Banking Dive’s summary of the deal, and aligns with CEO Laurent Ferreira’s strategy of leveraging the bank’s strong position in Quebec while building a truly national franchise. [33]
Coupled with the earlier CWB acquisition, these moves position National Bank as a leading consolidator among Canadian mid‑tier banks, a trend also highlighted in recent economic research on the concentration and efficiency of Canada’s banking sector. [34]
Macro backdrop: slower growth, easier policy
National Bank’s outlook is being shaped by a Canadian economy that is sluggish but not collapsing, and by a central bank that has pivoted cautiously toward easier monetary policy.
- The Bank of Canada cut its policy rate to 2.25% on October 29, 2025, citing a growth slowdown tied to U.S. tariffs and weak exports. [35]
- In its October Monetary Policy Report, the Bank trimmed its forecast for real GDP growth to 1.2% in 2025 and 1.1% in 2026, with a modest recovery to around 1.6% in 2027, while expecting inflation to hover near the 2% target. [36]
- National Bank’s own Monthly Economic Monitor – Canada projects GDP growth of about 1.7% in 2025 and 1.1% in 2026, with services inflation staying somewhat sticky and unemployment drifting higher before stabilizing. [37]
In this environment:
- Loan growth in consumer credit and residential mortgages is likely to remain subdued.
- Credit quality will stay under close scrutiny as households and businesses adjust to higher borrowing costs and trade uncertainty.
- Fee‑driven revenues from wealth management and capital markets – which just delivered standout gains for National Bank – become even more important to sustaining earnings. [38]
Analyst forecasts and price targets for NA.TO and NTIOF
Analyst and model‑driven forecasts collected today paint a broadly consistent picture: fundamentals look strong, but valuation is tight.
Consensus price targets
Different aggregators show slightly different numbers, but they cluster in a relatively narrow band:
- ValueInvesting.io
- Average 12‑month target: C$160.22
- Range: C$148.47–C$180.60
- Consensus rating: “Buy” from 22 analysts (mix of Strong Buy, Buy, Hold and a single Sell). [39]
- MarketBeat (TSX: NA)
- Average target: around C$150.77, with a high of C$168 and low of C$135.
- Implies about 11% downside from a recent trading price near C$169.65 at the time of compilation.
- Consensus rating: “Hold”. [40]
- StocksGuide
- Analyst mix: 12 Buy, 8 Hold, 1 Sell across 21 analysts.
- Describes the overall stance as “mostly Purchase” with estimated upside to 2026 of around 6–7%, based on average targets in the high‑150s. [41]
- TradingView
- Average price target: roughly C$163.46, with a range from about C$149 to C$183.
- Overall rating: “Buy” based on recent analyst calls. [42]
- TipRanks
- The most recent individual analyst update cited there is a Hold rating with a target near C$152.
- TipRanks’ AI‑based “Spark” tool, however, currently flags NA as “Outperform,” citing strong profitability and an attractive dividend but cautioning that technical indicators look overbought. [43]
Across these sources, a pattern emerges:
- Ratings skew positive (mostly Buy or Hold).
- Average targets cluster around the low‑C$160s, modestly below today’s mid‑C$170s price.
- Many analysts see limited short‑term upside after the 2025 rally, but few view the stock as fundamentally overvalued given its growth profile and capital strength.
Earnings and growth expectations
ValueInvesting.io’s consensus forecasts suggest: [44]
- Revenue rising from about C$11.9 billion this year to C$14.2 billion next year (roughly 19% growth), before normalizing to mid‑single‑digit gains.
- EPS moving from about C$10.69 this year to C$11.36 next year – around 6% growth off an already elevated base.
- Net income growing to roughly C$4.5 billion in 2025 on some forecast sets, roughly 19% higher than trailing 12‑month levels, with further gains into 2026–27. [45]
In other words, analysts expect solid but moderating growth: the big step‑up from acquisitions and fee businesses appears largely in place, but the tougher macro environment and higher provisions may cap near‑term earnings acceleration.
Key risks for National Bank of Canada stock
Even with today’s strong print, investors eyeing National Bank of Canada shares after this year’s rally need to weigh several risks.
1. Valuation risk
- The stock is near its 52‑week and all‑time highs, trading around 17x trailing earnings and 2x book, versus a Big Six average of about 12.9x forward earnings, itself above the group’s 10‑year norm. [46]
- With most price targets below the current share price, any earnings disappointment, regulatory shock or macro surprise could trigger a multiple compression.
2. Credit quality and provisions
- Q4 provisions for credit losses rose to C$244 million from C$162 million, partly reflecting growth and model updates but also a more challenging credit environment. [47]
- If growth undershoots Bank of Canada or National Bank’s own forecasts – for example due to prolonged trade tensions or a weaker labor market – loan losses could remain elevated or worsen, pressuring profitability. [48]
3. Integration and execution risk
- The successful integration of CWB and the planned Laurentian retail & SME portfolios is crucial for delivering the targeted revenue synergies and EPS accretion. [49]
- Missteps could show up in higher costs, operational hiccups, customer attrition or slower‑than‑expected capital relief.
4. Regulatory and macro uncertainty
- OSFI’s evolving guidance on capital and liquidity, while currently supportive of “smart risk‑taking,” remains a wild card for long‑term capital requirements and loan appetites. [50]
- Trade disputes, slower GDP growth and higher unemployment all have the potential to hurt loan demand and credit quality simultaneously. [51]
What today’s news means for investors heading into 2026
Putting it all together, today’s Q4 2025 earnings and dividend announcement confirm that National Bank of Canada is executing well on a growth strategy built around three pillars:
- Higher‑margin fee businesses in wealth management and capital markets. [52]
- Domestic consolidation, via Canadian Western Bank and the Laurentian retail & SME deal, to expand its footprint beyond Quebec while maintaining a Canada‑first focus. [53]
- Disciplined capital management, with a CET1 ratio of 13.8%, a mid‑40s payout ratio and a decade‑long record of dividend growth. [54]
From a non‑personal, informational standpoint:
- For long‑term, income‑oriented investors, National Bank remains a high‑quality Canadian bank with an attractive, growing dividend and a solid capital cushion.
- For value‑oriented investors, the current price already reflects much of that quality. With shares near record highs and analysts’ price targets mostly below the market, the stock looks more like a core holding to accumulate on pullbacks than a classic deep‑value opportunity. [55]
References
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