The National Bank of Canada Acquired Canadian Western Bank in $5 Billion Deal

Share swap puts the Edmonton-based lender at around $5 billion. National Bank of Canada has acquired Canadian Western Bank in an all-share deal worth around $5 billion, further consolidating the country’s banking system. The Quebec-focused National Bank will expand its geographic reach by acquiring Canadian Western’s activities, which are primarily concentrated in Alberta and British Columbia.

“This transaction will accelerate National Bank’s strategic plan and pan-Canadian growth,” CEO Laurent Ferreira stated during a conference call. The transaction comes only months after Royal Bank of Canada completed its $13.5 billion acquisition of HSBC Canada, which garnered criticism for growing market concentration and resulted in the loss of the country’s seventh-largest bank.

National Bank, Canada’s sixth largest bank, claimed its acquisition of Canadian Western will dramatically increase its western footprint and create a stronger national rival. Canadian Western has approximately 65,000 clients and 39 branches, 30 of which are in British Columbia and Alberta, while National Bank currently has only three each, compared to 280 in Quebec.

The transaction also means that National will increase its lending portfolio outside of Quebec by 37% when it accepts Canadian Western’s $37 billion in commercial-focused loans. “We will create a stronger full-service, coast-to-coast competitor, providing more choices to individuals, entrepreneurs and businesses across the country,” Ferreira stated.

National Bank intends to enhance its full-service offerings through Canadian Western Bank, including digital capabilities for all clients, while also providing wealth-management and risk-advisory services, which it claims have little overlap with Canadian Western. “We will work with CWB clients to increase banking services and increase investment in Western communities,” Ferreira stated.

In a statement, CWB CEO Chris Fowler stated, “We are proud to partner with National Bank and are confident that this combination will create incredible value for our clients, teams, communities, and shareholders.”