National Bank reports Q3 profit up from a year ago

National Bank of Canada reported a third-quarter profit of $1.03 billion, up from $830 million a year ago, helped by strength across its operations.

The Montreal-based bank said Wednesday its net income amounted to $2.89 per diluted share for the quarter ended July 31, up from $2.33 per diluted share a year earlier.

Revenue for the quarter totalled $3.00 billion, up from $2.49 billion in the same quarter last year.

The bank’s provision for credit losses, the amount it sets aside to cover bad loans, totalled $149 million for the quarter, up from $111 million a year earlier.

On an adjusted basis, National Bank says it earned $2.68 per diluted share in its most recent quarter, up from an adjusted profit of $2.18 in the same quarter last year.

The average analyst estimate had been for an adjusted profit of $2.49 per share, according to LSEG Data & Analytics.

“Our strong financial results for the third quarter reflect our diversified earnings mix and solid credit profile as well as disciplined execution across the Bank,” National Bank chief executive Laurent Ferreira said in a statement.

“With our prudent approach to capital, credit, and costs, we remain well-positioned in a complex macro environment and we look forward to the growth opportunities ahead.”

The results had provisions in line with expectations while the National Bank outperformed across a broad base, said Scotiabank analyst Meny Grauman in a note.

“Although NA comes into this quarter (and it has for a while now) vulnerable to missteps given that it continues to trade at a sizable premium to the group, once again it has been able to clear this (high) bar.”

The beat pushed National Bank’s share price up over 5% to over $126 as of early afternoon trading, marking a more than 27% gain from a year earlier.

The bank did warn that it expects rising unemployment to lead to higher delinquencies and impaired provisions ahead, but that the effects are softened by its focus on the steadier Quebec economy and its prudent approach to capital. 

The bank said its personal and commercial operations earned $366 million in the third quarter, up from $319 million in the third quarter of last year, helped by growth in total revenue.

National Bank’s wealth management business earned $217 million in its latest quarter, up from $183 million in the same quarter last year. The bank attributed the associated revenue increase to growth in fee-based revenues and net interest income.

The bank’s financial markets business earned $318 million in the quarter, up from $205 million a year earlier, while its U.S. specialty finance and international operations earned $158 million, up from $128 million.

National Bank’s “other” category reported a loss of $26 million in its latest quarter compared with a loss of $5 million in the same quarter in 2023.

National Bank announced in June that it is buying Canadian Western Bank in a share exchange that values the Edmonton-based lender at approximately $5 billion.