shares tumbled Friday after the lender suddenly postponed the release of its fourth-quarter earnings, sparking speculation across Bay Street at a time when National Bank of CanadaCWB’s stock price was down 5.7 per cent at 1:20 p.m. in Toronto as investors try to make sense of the abrupt change in plans. The bank – which was set to release its fiscal year-end results early Friday morning – released a statement at 2:40 a.m.
Canada’s banking regulator, the Office of the Superintendent of Financial Institutions, is currently reviewing the proposal, he said. The final step will be for Finance Minister Chrystia Freeland to green light the deal. He added that he expects the deal to close in early 2025.In a note to clients in late November before banks reported fourth-quarter earnings, Scotiabank analyst Meny Grauman said National Bank could close the CWB deal before Christmas.
In recent quarters, CWB has grappled with higher-than-expected provisions for loans that could default. In third-quarter earnings released at the end of August, the bank said that the increase in provisions was driven by two specific client accounts, and that it did not expect further issues.“Given its pending acquisition by NA, CWB is also in a unique position where results are unlikely to drive material moves in the stock,” Mr. Grauman said in the note.
In June, National Bank of Canada announced its intention to buy Canadian Western Bank in a deal that extends the reach of the country’s sixth-largest lender into Alberta and British Columbia.At the time, National Bank said it would gain $37-billion in loans across 65,000 customers and 39 branches in Western Canada and Ontario. The deal would increase National Bank’s Canadian lending portfolio outside of Quebec by 37 per cent.
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