Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

National Bank of Canada profit beats on trading strength

Published 2024-02-28, 09:36 a/m
Updated 2024-02-28, 09:36 a/m
© Reuters. FILE PHOTO: The National Bank of Canada logo is seen outside of a branch in Ottawa, Ontario, Canada, February 14, 2019. REUTERS/Chris Wattie/File Photo

(Reuters) -National Bank of Canada reported a better-than-expected first-quarter profit on Wednesday as robust performance at its trading and investment banking unit cushioned the hit from an increase in loan loss provisions.

Easing fears of a recession have encouraged investors to wade back into stocks and other fixed-income products, boosting markets and trading desks at banks.

Revenue at National Bank's financial markets unit jumped 10% to C$755 million ($556.09 million) in the first quarter, helped by strong demand for equity products.

Fee-based revenue from the company's wealth management unit also rose 8% to C$375 million.

However, an uncertain economic environment and high borrowing costs have raised the threat of more borrowers falling behind on their loan repayments, prompting lenders to set aside bigger rainy-day funds.

Montreal-based National Bank's provisions for credit losses in the first quarter rose to C$120 million from C$86 million.

The windfall from high interest rates has also tapered off as banks pay out more on deposits to retain customers from chasing higher-yielding alternatives.

National Bank's net interest income, or the difference between what banks earn on loans and pay out on deposits, slumped 31.7% to C$751 million in the first quarter.

© Reuters. FILE PHOTO: The National Bank of Canada logo is seen outside of a branch in Ottawa, Ontario, Canada, February 14, 2019. REUTERS/Chris Wattie/File Photo

On an adjusted basis, the lender earned C$2.59 per share, beating analysts' estimates of C$2.36, according to LSEG data.

($1 = 1.3577 Canadian dollars)


Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.