Canadian Western Bank to Reduce Stated Capital

Summary#

Canadian Western Bank says it will ask the federal regulator for permission to reduce the stated capital of its common shares and its first preferred shares to $1.00 each. This change is part of a capital reorganization tied to the bank becoming a wholly owned subsidiary of National Bank of Canada, planned after February 20, 2025. The notice was published February 8, 2025.

What it does#

• Proposes to cut the stated capital account for the bank’s common shares to $1.00.
• Proposes to cut the stated capital account for the bank’s first preferred shares to $1.00, applied proportionally across all series of those preferred shares.
• Says no payment or distribution will be made to the sole shareholder when the reductions happen.
• Intends those reductions to take effect immediately before the planned amalgamation with National Bank of Canada.
• Makes the changes conditional on written approval from the Superintendent under Bank Act (Canada) rules and on the bank’s CEO and CFO being satisfied the cuts won’t breach certain regulatory directions.
• Authorizes bank officers to sign papers and take necessary steps to carry out the resolution.

Who's affected#

• The most directly involved party is Canadian Western Bank and its corporate owner after the reorganization (the sole shareholder, expected to be National Bank of Canada).
• Holders of the bank’s first preferred shares and common shares may be interested, but the notice does not say the cuts will change payments to investors.
• The federal regulator (the Office of the Superintendent of Financial Institutions) is the decision-maker on approval.
• Day-to-day customers (depositors and retail clients) are unlikely to see an immediate change from this notice alone.

Why it matters#

• This is a corporate accounting and capital-structure move tied to a takeover-style reorganization. It helps set the bank up, on paper, to join National Bank of Canada.
• It requires regulator approval, so it is not final. Approval is subject to the regulator’s review and the bank’s officers certifying no regulatory breach.
• For investors, creditors, and market watchers, it signals how the merger or acquisition will be implemented and may affect how the bank’s capital is reported. For most customers, it should not change everyday banking services.