Banking

National Bank plans new buyback of up to 10 million shares, worth as much as $2.25 billion

The new bid covers about 2.6% of the bank's common shares and follows a year in which National Bank expanded its previous program and kept its CET1 ratio at 13.5%.

By John Wilson · September 25, 2026

National Bank of Canada (TSX: NA) wants to keep shrinking its share count. The Montreal-based lender said Friday that its board has authorized a new normal course issuer bid to repurchase for cancellation up to 10,000,000 common shares, for a maximum of $2.25 billion.

That represents about 2.6% of the 382,837,767 common shares outstanding on September 1, 2026. The bid still requires approval from the Office of the Superintendent of Financial Institutions (OSFI) and the Toronto Stock Exchange, and is expected to begin on or around October 9, 2026 and run until about October 8, 2027.

The numbers in context

New program: up to 10 million shares, capped at $2.25 billion, about 2.6% of shares outstanding
Previous program, launched September 25, 2025: initially up to 8 million shares, or 2.04% of shares outstanding
In March 2026, regulators approved an amendment raising that cap to 14.5 million shares
By February 28, 2026, the bank had repurchased 6,376,200 shares at an average price of $165.75
Shares outstanding fell from 392,069,258 on August 21, 2025 to 382,837,767 on September 1, 2026

Why a bank buys back stock

A buyback returns surplus capital to shareholders by reducing the number of shares, which raises each remaining share's claim on future profits. National Bank has the earnings to support it. In its third quarter ended July 31, it reported net income of $1,307 million, up 23% from a year earlier, and diluted earnings per share of $3.25, up 26%. Its Common Equity Tier 1 (CET1) capital ratio stood at 13.5%, down from 13.8% at the end of October 2025.

The bank also declared a quarterly dividend of $1.32 per common share, payable November 1, 2026. The new bid will be carried out on the TSX and Canadian alternative trading systems at market prices, and the bank may use automatic purchase programs through its broker, National Bank Financial.

The other side of the ledger

A buyback is a ceiling, not a commitment. The bank says the actual number of shares bought and the timing are at its discretion, and it lists trade tensions, tariffs, geopolitical uncertainty and recession risk among the factors that could change its plans. Its CET1 ratio has already drifted lower this year, partly because of buybacks, and regulators require banks to hold capital buffers that can tighten in a downturn.

There is also a valuation question. Repurchases create the most value when shares are bought below their intrinsic worth; buying heavily when shares are richly valued does less for long-term holders than it might appear.

What it means for an ordinary investor

For shareholders, a buyback works like a quiet, tax-deferred distribution: no cash lands in your account, but your slice of the bank grows slightly. For investors comparing Big Six banks, the total of dividends plus buybacks, often called shareholder yield, gives a fuller picture than the dividend alone. Holding bank shares through a broad Canadian index fund or ETF spreads company-specific risk. This is general information, not personalized advice.

Sources

General news and information, not individualized financial advice. Figures reflect the publication date.