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National Bank of Canada NA

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Morningstar’s Analysis

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Solid Balance Sheet Growth and Fees Help National Bank of Canada Record a Solid Fiscal Third Quarter

Eric Compton, CFA Senior Equity Analyst

Analyst Note

| Eric Compton, CFA |

Narrow-moat rated National Bank of Canada reported solid fiscal third-quarter results. Earnings per share were CAD 2.36, representing solid year-over-year growth compared with EPS of CAD 1.66 in the same period a year ago and higher than last quarter’s EPS of CAD 2.25. Provisioning continues to be a major driver of improved earnings, coming in at a net benefit of CAD 43 million this quarter, a multi-year low and materially lower than the CAD 500 million charge the bank took in the second quarter of 2020. This aligns with our view that the Canadian banks will be fine from a credit perspective and that better results should be the norm going forward. We still expect the return of fee growth and much lower provisions to drive solid earnings growth for the rest of the year, while the lack of a boost from lower provisioning will make for tougher comps for the Canadian banks in 2022.

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Company Profile

Business Description

National Bank of Canada is the sixth-largest Canadian bank. The bank offers integrated financial services, primarily in the province of Quebec as well as the city of Toronto. Operational segments include personal and commercial banking, wealth management, and a financial markets group.

600 De La Gauchetiere Street West, 4th Floor
Montreal, QC, H3B 4L2, Canada
T +1 514 394-5000
Sector Financial Services
Industry Banks - Diversified
Most Recent Earnings Jul 31, 2021
Fiscal Year End Oct 31, 2021
Stock Type
Employees 26,517