Strong lending growth powers National Bank's biggest profit jump in recent quarters
National Bank of Canada reported a 23% rise in third-quarter 2026 net income Wednesday, with personal lending growth of 13% pointing to sustained mortgage demand even as trade and geopolitical uncertainty continues to cloud Canada's economic outlook.
The Montreal-headquartered lender posted net income of $1,307 million for the three months ended July 31, up from $1,065 million in the same quarter a year earlier.
On an adjusted basis, excluding items related to the acquisition of Canadian Western Bank (CWB) and transactions with Laurentian Bank of Canada (LBC), adjusted net income reached $1,362 million.
Adjusted diluted earnings per share came in at $3.39, up 26% from $2.68 a year ago.
For brokers tracking the health of Canada's major lenders, the personal and commercial banking segment's results offer a direct read on mortgage market conditions.
Net income in that segment rose 14% to $421 million, supported by net interest income growth tied to loan and deposit volume expansion.
Personal lending climbed 13% year-over-year while commercial lending grew 4%, both gains attributed by the bank to solid organic growth.
Net interest margin, however, edged lower to 2.19% from 2.25% a year earlier, a compression consistent across Canada's major lenders as competition for mortgage business remains intense.
Provisions for credit losses in the personal and commercial segment fell $17 million year-over-year, largely due to a decline in provisions on non-impaired loans. That's a signal that borrowers, including those navigating the ongoing mortgage renewal cycle, are broadly meeting their obligations.
Capital markets and wealth management drive headline growth
While personal and commercial banking posted steady gains, the headline profit surge was led by Capital Markets, where net income jumped 32% to $442 million on 34% revenue growth driven by global markets activity.
Wealth Management net income rose 21% to $296 million on fee-based revenue growth.
For the nine-month period ended July 31, National Bank's net income totalled $3,795 million, up 28% from $2,958 million a year earlier.
The bank cited the increased contribution from CWB, which added an extra quarter of results in 2026 versus 2025.
National Bank's Q1 2026 earnings report, also driven by the CWB integration and strong lending volumes, first signalled the momentum the bank carried into the second half of the year.
The Common Equity Tier 1 (CET1) capital ratio under Basel III stood at 13.5% as at July 31, down from 13.8% at October 31, 2025.
The board declared a dividend of $1.32 per common share, payable November 1 to shareholders of record on September 28.
"We delivered strong earnings and revenue growth, as well as a high return on equity, continuing the momentum achieved since the beginning of the year," said Laurent Ferreira, President and Chief Executive Officer of National Bank of Canada.
"Despite trade and geopolitical uncertainty, Canada's resilience and the retooling of its economy are creating opportunities for growth."
National Bank is the third of Canada's Big Six to report third-quarter results, following Bank of Montreal and Scotiabank on Tuesday.
Royal Bank of Canada, Toronto-Dominion Bank, and Canadian Imperial Bank of Commerce are scheduled to release their financials on Thursday.
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