Canada’s highly regulated banking sector has long provided a stable environment where domestic players can thrive across economic cycles. The country’s top financial institutions have a proven track record of delivering steady profits and sustaining dividend payouts even during downturns like the 2008–09 financial crisis. Looking ahead to 2025 and beyond, two Canadian bank stocks stand out for their strong dividend growth potential — EQB Inc. and National Bank of Canada.
Also Read: Reliable TSX dividend stocks 2025
EQB Inc. (TSX:EQB)
EQB, often called Canada’s “Challenger Bank,” is valued at about $3.4 billion and recently faced a challenging fiscal third quarter. Net income fell 32% year over year to $80.3 million, while return on equity dropped to 10.1% from 12.4%. The bank expects fiscal 2025 RoE at around 11.5%, below its midterm target of 16%. Rising credit impairments — especially in single-family residential mortgages within Toronto suburbs, where housing prices have declined as much as 30% — have weighed on results.
Despite these short-term pressures, EQB remains a promising long-term dividend play. Since 2016, its annual dividend has surged from $0.42 to $1.74 per share, with analysts projecting it will reach $2.74 by 2028. Earnings are expected to grow from $9.58 per share in 2025 to $12.47 in 2028, which could lift the stock by roughly 25% over two years. Factoring in dividend reinvestment, total returns could approach 30%. With a renewed leadership team focused on profitable growth, diversification, and AI-driven innovation, EQB is positioning itself for recovery and expansion.
Also Read: Dividend paying stocks Canada
National Bank of Canada (TSX:NA)
National Bank, with a $60 billion market cap, is another reliable dividend grower. Its annual payout has doubled from $2.18 per share in 2016 to $4.32 in 2024, with projections calling for $5.33 by 2029. A major growth catalyst is its U.S.-based subsidiary, Credigy, which manages over $8 billion in assets and specializes in purchasing and financing structured credit products. Credigy maintains a best-in-class efficiency ratio below 30% and targets sustainable asset growth of 5–10% annually.
Analysts expect National Bank’s earnings to rise from $10.39 per share in 2024 to $12.64 by 2027. If valued at 14 times earnings, the stock could deliver over 20% gains within 18 months — even before factoring in its growing dividends.
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