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1. Company Snapshot

1.a. Company Description

Canadian Western Bank provides personal and business banking products and services primarily in Western Canada.The company offers current, savings, cash management, US dollar, and chequing accounts, as well as organization, strata solution/condo, general trust, and trust fund investment accounts.It also offers commercial lending and real estate, and equipment financing and leasing products; loans and mortgages; secured and unsecured lines of credit; registered retirement savings plan; consolidation, vehicle, and recreation vehicle loans; and credit cards.


In addition, the company offers cash management services; life and disability insurance products; and ATM, mobile, and online banking services, as well cheque order services.Further, it provides investment products comprising guaranteed investment certificates, registered retirement income funds, tax-free savings accounts, registered education savings plans, and mutual funds, as well as personal and business planning services.Canadian Western Bank was founded in 1984 and is headquartered in Edmonton, Canada.

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1.b. Last Insights on CWB

Canadian Western Bank's recent performance was negatively impacted by higher provisions for credit losses, which hit its Q4 earnings. The company's provisions for credit losses increased, contributing to a decline in net income. Additionally, the termination of its dividend reinvestment plan may have hurt investor confidence, as it was done in connection with the proposed acquisition by National Bank of Canada. The final approval for National Bank's acquisition of CWB may also be a negative driver, as it could lead to the loss of CWB's autonomy and potentially disrupt its operations.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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National Bank completes acquisition of Canadian Western Bank

Feb -03

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Canadian Western Bank Announces the Termination of its Dividend Reinvestment Plan

Jan -16

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Canadian Western Bank Announces the Mailing and Filing of Letters of Transmittal in Connection with the Acquisition of Canadian Western Bank by National Bank

Dec -27

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National Bank gets final nod for $3.47bn Canadian Western Bank acquisition

Dec -23

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National Bank receives final approval to proceed with the acquisition of Canadian Western Bank

Dec -20

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Canadian Western Bank Q4 Earnings Hit by Higher Provisions for Credit Losses

Dec -18

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CWB reports fourth quarter and full year 2024 financial performance

Dec -18

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CWB to report fourth quarter and fiscal 2024 results on December 18, 2024

Dec -17

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.00%)

6. Segments

Banking and Related Activities

Expected Growth: 6%

Canadian Western Bank's 6% growth in Banking and Related Activities is driven by strong loan growth, increased deposit volumes, and expansion into new markets. Additionally, the bank's focus on digital transformation, improved operational efficiency, and strategic partnerships have contributed to its growth. Furthermore, a favorable interest rate environment and a strong Canadian economy have also supported the bank's growth momentum.

7. Detailed Products

Personal Banking

Personal banking services for individuals, including chequing and savings accounts, credit cards, loans, and investment products.

Business Banking

Business banking services for small to medium-sized businesses, including commercial loans, cash management, and trade finance solutions.

Commercial Banking

Commercial banking services for large corporations, including commercial lending, treasury management, and risk management solutions.

Wealth Management

Wealth management services, including investment advice, portfolio management, and estate planning.

Equipment Financing

Equipment financing solutions for businesses, including loans and leases for equipment purchases.

Real Estate Financing

Real estate financing solutions for commercial and residential properties, including construction loans and mortgages.

Treasury Services

Treasury services, including cash management, foreign exchange, and trade finance solutions.

8. Canadian Western Bank's Porter Forces

Forces Ranking

Threat Of Substitutes

Canadian Western Bank has a low threat of substitutes due to its strong brand recognition and customer loyalty.

Bargaining Power Of Customers

Canadian Western Bank's customers have some bargaining power due to the availability of alternative banking services, but the bank's strong customer relationships and personalized services mitigate this threat.

Bargaining Power Of Suppliers

Canadian Western Bank has a low bargaining power of suppliers due to its strong financial position and ability to negotiate favorable terms with its suppliers.

Threat Of New Entrants

Canadian Western Bank has a low threat of new entrants due to the high barriers to entry in the banking industry, including regulatory hurdles and capital requirements.

Intensity Of Rivalry

Canadian Western Bank operates in a highly competitive banking industry, with many established players competing for market share, resulting in a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 67.32%
Debt Cost 11.67%
Equity Weight 32.68%
Equity Cost 11.67%
WACC 11.67%
Leverage 206.01%

11. Quality Control: Canadian Western Bank passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Shore Bancshares

A-Score: 6.6/10

Value: 7.4

Growth: 6.2

Quality: 6.3

Yield: 5.0

Momentum: 7.0

Volatility: 7.7

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First Seacoast Bank

A-Score: 5.6/10

Value: 8.6

Growth: 2.0

Quality: 4.5

Yield: 0.0

Momentum: 9.0

Volatility: 9.7

1-Year Total Return ->

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Southern First

A-Score: 5.1/10

Value: 5.7

Growth: 5.2

Quality: 5.2

Yield: 0.0

Momentum: 8.0

Volatility: 6.3

1-Year Total Return ->

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Carter Bankshares

A-Score: 4.9/10

Value: 5.7

Growth: 4.3

Quality: 5.9

Yield: 0.0

Momentum: 6.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
Canadian Western

A-Score: 4.8/10

Value: 3.9

Growth: 5.1

Quality: 5.9

Yield: 4.0

Momentum: 5.5

Volatility: 4.7

1-Year Total Return ->

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Blue Foundry Bank

A-Score: 4.7/10

Value: 8.8

Growth: 5.1

Quality: 4.6

Yield: 0.0

Momentum: 2.5

Volatility: 7.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

56.63$

Current Price

56.63$

Potential

-0.00%

Expected Cash-Flows