Finance Minister approves National Bank’s stock-swap deal for Canadian Western Bank

National Bank of Canada NA-T has cleared the last hurdle in its effort to acquire Canadian Western Bank CWB-T.

Federal Finance Minister Dominic LeBlanc approved the proposed $5-billion stock-swap deal on Friday, just days after he replaced Chrystia Freeland in the role. Canada’s banking regulator, the Office of the Superintendent of Financial Institutions, also blessed the transaction on Friday, National Bank spokesperson Debby Cordeiro said via e-mail.

The Competition Bureau of Canada signed off on the deal in late September, meaning all required approvals have now been received. The deal is set to close on Feb. 3, the two banks said in a joint statement, and National Bank intends to provide financial information related to the deal alongside its first-quarter results on Feb. 26.

Edmonton-based CWB reported lower-than-expected fourth-quarter profit on Wednesday, after a lawsuit forced the bank to delay the release of its quarterly results by nearly two weeks. Ripple effects from the collapse of Canadian trucking conglomerate Pride Group Holdings Inc. have required CWB to set aside large sums of money as provisions against loans at risk of default and the bank warned on Wednesday that loan loss provisions will remain elevated through most of 2025.

Montreal-based National Bank said it will start including CWB in its own consolidated financial results starting in the second quarter of 2025. Current Canadian Western shareholders will own about 10.5 per cent of National Bank after the deal closes and National Bank has said it will add two Canadian Western directors to its board.

Acquiring CWB will dramatically expand National Bank’s presence in Western Canada, where it has been seeking to build its business for several years. CWB is Canada’s eighth-largest lender, with $37-billion in loans across 65,000 customers and 39 branches in Western Canada and Ontario.

National Bank is the country’s sixth-largest bank, with $462-billion in assets. The combined entity will have 19 branches in British Columbia and 17 in Alberta. National Bank currently has only three branches in each province.

Separately on Friday, National Bank announced Michael Denham, previously the bank’s executive vice-president of commercial and private banking, is being promoted to vice-chair as of March 1, 2025. Mr. Denham will be responsible for leading the integration of CWB.

When the deal was first announced in June, National Bank said it expects to save $270-million annually within three years of the transaction closing.