National Bank profits rise
Quebec-focused National Bank of Canada bucked the general trend of downward profits among banks this quarter as it benefited from higher stability in its home market.
The Montreal-based bank on Wednesday reported a secondquarter profit of $906 million, up from $832 million a year earlier, while raising its quarterly dividend by four cents to $1.10 per share.
The increased payment to shareholders came as National Bank says its profit amounted to $2.54 per diluted share for the quarter ended April 30, up from $2.34 per diluted share in the same quarter last year. Adjusted profits were reported as the same.
The bank is the only one of the four that have reported so far to show a rise in both adjusted and unadjusted profits, as banks set aside more money for potentially bad loans and loan growth slows.
Scotiabank reported profits were down in both categories, while TD’s unadjusted profits were down and BMO’s adjusted profits dropped.
National Bank has not been immune from credit trends that have pressured other bank earnings, reporting $138 million in provisions for credit loss, up from $85 million last year, but that was largely in line with analyst expectation.
Chief executive Laurent Ferreira credited the performance of the bank to its disciplined execution of strategy and diversified earnings power, but National Bank has also benefited from a concentration in its home market, where it generates a little over half of its revenue.
Uninsured variable rate mortgage delinquencies in the Quebec region still remain below prepandemic levels, said chief risk officer William Bonnell.
He said the performance can be explained by Quebec households being more resilient, with more dual-income families and the economy more diversified, but especially because of lower house prices.