By Robb M. Stewart
National Bank of Canada saw a rise in profit in the latest quarter, driven by its wealth management and financial markets operations that more than offset an increase in the bank's credit-loss provisions.
Net income increased to 997 million Canadian dollars ($696.4 million), or C$2.78 a share, for the fiscal first quarter from C$922 million, or C$2.59, a year earlier.
Excluding certain items including those related to its acquisition of Canadian Western Bank, adjusted per-share earnings rose to C$2.93 for the three months to Jan. 31, ahead of the C$2.65 mean estimate of analysts polled by FactSet.
The lender's overall revenue rose 17% for the quarter to C$3.18 billion, beating the C$3.03 billion expected by analysts.
Net interest income increased to C$972 million from C$751 million in the same period last year, while non-interest income advanced to C$2.21 billion from C$1.96 billion.
The Montreal-based bank recorded C$254 million in provisions for credit losses in the latest period, versus C$120 million a year earlier. That was higher than the C$197 million analysts anticipated.
Income from National Bank's personal and commercial operations fell 14% year-over-year, squeezed by a sharp rise in credit-loss provisions and despite a rise in revenue due largely to growth in loan and deposit volumes. Countering that, wealth management income was up 23% with growth in fee-based revenue and net interest income, and income from financial markets operations climbed 35% as revenue was buoyed by growth in global markets.
Canada's sixth-largest lender earlier this month completed its more than C$5 billion takeover of Canadian Western Bank, significantly expanding its footprint in Alberta and British Columbia from what had largely been a focus on Quebec.
National Bank's common equity Tier 1 ratio stood at 13.6% at the end of January, down a tick from 13.7% at end-October. Canada's banking regulator, the Office of the Superintendent of Financial Institutions, at the end of last year maintained the capital buffer the country's big banks need to set aside to absorb possible losses due to unexpected shocks with a target common equity Tier 1 ratio of at least 11.5% of total risk-weighted assets.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
February 26, 2025 07:13 ET (12:13 GMT)
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