Canadian Western Bank shares soar after announcing deal with National Bank

WATCH ABOVE: Canada’s banking sector faces further consolidation as the National Bank of Canada has reached an all-share deal to acquire Canadian Western Bank that values the lender at about $5 billion. Anne Gaviola has this story and more in Business Matters for Wednesday June 12, 2024. CWB shares closed up 68.3 per cent at $41.

He said the consolidation potential comes as smaller banks are unable to overcome the many structural competitive advantages of the large banks, including economies of scale, extensive branch networks, and lower funding costs.Shares of Laurentian Bank, whose search for a buyer last year didn’t lead to a deal, closed up 6.6 per cent, while shares for EQ Bank owner EQB Inc. closed up 2.9 per cent after giving up some gains earlier in the day.

“It’s definitely a good thing,” she said. “It’s really about growing National Bank’s already growing portfolio and it doesn’t take anything away from the market. It gives National a broader depth of services.” The deal doesn’t raise the same concerns that RBC’s acquisition of HSBC Canada did, said Keldon Bester, executive director of the Canadian Anti-Monopoly Project.

“The continuing trend is worrisome … this is one less door that folks are able to knock on for things like small business financing.” “Banking has always been driven by scale, but it has become increasingly more important given the uptick in spending over the past decade on regulatory and technology costs.”

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