Canadian Bank Stock Continues to Grow Despite Recent Surge

After climbing nearly 50% in a year, National Bank of Canada (TSX: NA) stock may seem like it's due for a correction. However, a closer look reveals that the bank is actually delivering on its growth promises.

The key driver behind this surge is the bank's strategic acquisition of Canadian Western Bank. This deal has given National Bank a much larger national footprint and improved its profitability.

Adjusted earnings per share rose 13% year over year to $3.23 in the second quarter of fiscal 2026, while adjusted return on equity (ROE) climbed to 16.8% from 15.6%. Personal and commercial banking has been particularly encouraging, with organic growth alongside CWB-related synergies.

Management is also focusing on integrating the combined business, which should lead to further improvements in profitability. The bank's acquisition of portions of Laurentian Bank's retail and small and medium-sized business portfolios will give it another opportunity to add customers and deposits without swallowing an entire competitor.

The dividend has also been increased by 6% to $1.32 per share, with a yield of around 2.4%. While this may not be the highest-yielding stock, its potential for long-term growth is significant, especially if earnings continue to rise.