Canadian Western Bank Cuts Share Capital

Summary#

Canadian Western Bank says it will ask the Superintendent of Financial Institutions (Canada) for permission to cut the stated capital for its common and first preferred shares to $1.00. This step is described as happening immediately before the bank’s planned capital reorganization and proposed amalgamation with National Bank of Canada on February 20, 2025. The notice does not mean the regulator has approved it.

What it does#

• Reduces the stated capital account for common shares to $1.00.
• Reduces the stated capital account for first preferred shares to $1.00, applied ratably across all series of those preferred shares.
• Specifies that no payment or distribution will be made to the bank’s sole shareholder when the reductions are made.
• Makes the reductions effective immediately before the proposed amalgamation with National Bank of Canada on February 20, 2025.
• Makes the reductions subject to written approval under the Bank Act (Canada) and to sign-off by the bank’s President/CEO and CFO that the change would not violate relevant regulations.

Who's affected#

• Primarily Canadian Western Bank and its sole shareholder at the time of the change (which the notice says will be National Bank of Canada after the capital reorganization).
• The Superintendent of Financial Institutions (Canada), because their approval is required.
• Investors or holders of the bank’s first preferred shares could be affected in how capital is recorded, though the notice says no cash will be distributed to the sole shareholder.
• Everyday customers and the general public are not identified in the notice as being directly affected.

Why it matters#

• This is a corporate accounting and capital-structure step taken ahead of a planned merger. It changes how the bank’s share capital will be recorded, which can matter for regulatory capital, reporting, and the rights tied to share classes.
• The change needs regulator approval, so publication of the notice does not mean it will happen.
• For most people (depositors, branch customers), it will probably have no direct impact; for shareholders, creditors, and regulators it is a relevant corporate-action development.