A rival of National Bank of Canada, Canadian Western Bank, will be acquired by the bank for C$5 billion (US$3.63 billion).

The transaction is the most recent in Canada's tightly regulated banking industry, which is mostly managed by the country's "big six" lenders: TD, National Bank, Royal Bank, Bank of Montreal, Scotiabank, and CIBC. The biggest banker in the nation, Royal Bank of Canada, purchased HSBC Canada earlier in 2024.

By uniting two of the biggest lenders in the nation, the purchase of Canadian Western Bank is anticipated to conclude in 2025, increasing National Bank of Canada's exposure throughout the whole nation.

extending one's reach throughout Canada
Established in 1984, Canadian Western Bank specializes on business banking. Its areas of expertise include asset management, trust services, and equipment financing. It has 39 offices and more than 65,000 clients in Canada.

Although the majority of its activities are centered on British Columbia and Alberta, the purchase will enable the bank to grow into new regions. Similarly, as National Bank CEO Laurent Ferreira says, its C$37 billion (US$26.9 billion) loan book boosts National Bank of Canada's lending portfolio outside of Quebec by 37%.

"This deal is about expansion and helps us achieve our goals both nationally and in Western Canada," he states.

With regulatory clearance pending, this transaction will give Montreal-based National Bank a stronger footprint in Western Canada. One of the largest pension funds in both Canada and North America, the Caisse de dépôt et placement du Québec, is supporting the acquisition by investing C$500 million (US$364.36 million) in National Bank.

The Caisse stated that, when the deal is finalized, it will rank as National Bank's second-largest shareholder, according to The Wall Street Journal. The pension fund oversees contributions from inhabitants of Quebec and is tasked with generating returns while promoting economic growth across the region.

The merger agreement, according to both banks, would allow them to expand and grow their businesses across Canada and provide superior goods and services on a nationwide basis.

The National Bank of Canada is still expanding.

Many Canadian banks have begun to see development outside of the nation in recent years. Instead, National Bank of Canada has focused on domestic acquisitions, and this has undoubtedly paid off.

It has a significant growth opportunity as it extends its expansion efforts to the west of the nation with the acquisition of Canadian Western Bank. In 2024, the bank's stock has also increased by 16% thus far. This places it among the fastest-growing banking equities in Canada, according to Reuters.

In light of this, the purchase will provide it access to the billion-dollar loan book of Canadian Western Bank, which consists of loans for real estate, business, oil and gas, equipment finance, and mortgages.

In addition to expanding its wealth management division, National Bank has concentrated on its capital markets division, which generates one-third of its total revenue.