The Department of Finance has launched a public consultation to gather feedback on National Bank of Canada’s proposed acquisition of Canadian Western Bank.
The acquisition requires approval from the Minister of Finance under the Bank Act, which mandates that all mergers and acquisitions in the Canadian banking sector undergo regulatory scrutiny to protect public interest and ensure a stable financial system.
The consultation process will allow Canadians, stakeholders, and organizations to voice their perspectives on whether the proposed acquisition serves the best interests of the financial system and the public. The Finance Department specifically encouraged input on a range of factors the Minister will consider, including the potential effects on competition, the rights of consumers and employees, the impact on financial stability, and whether the transaction benefits the affected regions.
In addition to the Department of Finance’s review, the acquisition has undergone assessments by other regulatory bodies. On July 10, the Competition Bureau began its review, which concluded in September with the issuance of a No-Action Letter, signallingaling that the bureau does not intend to challenge the acquisition on competition grounds. Additionally, the Office of the Superintendent of Financial Institutions (OSFI) will oversee the application process and provide a recommendation to the Minister of Finance regarding the acquisition.
National Bank, headquartered in Montreal, is currently the sixth-largest bank in Canada and a significant player in the Quebec market. Canadian Western Bank, based in Edmonton, operates primarily in Western Canada, including Alberta, British Columbia, Saskatchewan, Manitoba, and Ontario. As part of its acquisition proposal, National Bank has committed to expanding banking services for Canadian Western Bank clients, maintaining the bank’s operational base in Edmonton, enhancing investment in Western Canada, and appointing two Canadian Western Bank directors to its board.
For the acquisition to proceed, Canadian Western Bank will require recategorization to exempt it from the requirement that its shares be widely held, as required under the Bank Act.
The Finance Department’s consultation will remain open until November 19, after which the Minister of Finance will consider all submissions to inform her decision on the proposed acquisition.