Open this photo in gallery:
National Bank of Canada reported first-quarter profit of $1.25-billion, up from $997-million the year before.Ryan Remiorz/The Canadian Press
National Bank of Canada NA-T reported a jump in first-quarter profit that topped analysts’ expectations, bolstered by the lender’s takeover of Canadian Western Bank.
National Bank earned $1.25-billion, or $3.08 per share, in the three months that ended Jan. 31. That compared with $997-million, or $2.78 per share, in the same quarter last year.
Adjusted to exclude certain items, including costs related to the acquisition of CWB, the bank said it earned $3.25 per share. That beat analysts’ estimates of $2.99, according to data from S&P Capital IQ.
The bank also said it is boosting the number of shares it is buying back, increasing its repurchase plan to 14.5 million shares, up from its previous announcement of 8 million shares. To date, it has bought back 6.4 million shares.
“We are executing on our financial objectives with discipline, driving organic growth and operational efficiency as we reinforce our pan-Canadian reach, and creating long-term value for our shareholders,” National chief executive officer Laurent Ferreira said in a statement.
National Bank CEO says deal to buy Canadian Western Bank accelerates growth outside Quebec
National Bank is the third major Canadian bank to report earnings for the fiscal first quarter. Bank of Montreal BMO-T and Bank of Nova Scotia BNS-T posted earnings that beat analyst expectations. Royal Bank of Canada RY-T, Toronto-Dominion Bank TD-T and Canadian Imperial Bank of Commerce CM-T will close out the week on Thursday.
In the quarter, National Bank set aside $244-million in provisions for credit losses – the funds banks set aside to cover loans that may default. That included $215-million against loans the bank believes may not be repaid, based on models that use economic forecasting to predict future losses.
In the same quarter last year, National Bank reserved $254-million in provisions.
Total revenue rose 22 per cent in the quarter to $3.89-billion while expenses increased 22 per cent to $2.01-billion, which the bank said was driven by the CWB takeover and higher variable compensation, salaries and benefits.
Profit from Canadian personal and commercial banking was $427-million, up 47 per cent from a year earlier, as the lender integrated CWB.
The wealth management division generated $272-million of profit, up 12 per cent on higher fee-based revenue.
Profit from the bank’s capital markets arm was up 6 per cent at $443-million, driven by higher corporate and investment banking revenue.
