MONTREAL 鈥� National Bank of Canada reported that profits were up in the third quarter despite a notable drop in its financial markets division and higher provisions for bad loans.
The bank had solid earnings but a "less constructive backdrop" in its financial markets segment, chief executive Laurent Ferreira said in a statement.聽
National Bank reported its financial markets operations earned $205 million in its latest quarter, down from $279 million in the third quarter of 2022. It blamed the drop on lower trading activity and exceptionally low market volatility.
Overall, the Montreal-based bank reported a net income of $839 million or $2.36 per diluted share for the quarter ended July 31, up from $826 million or $2.35 in the third quarter of 2022.
Revenue for the quarter totalled $2.52 billion, up from $2.41 billion in the same quarter last year.
On an adjusted basis, National Bank says it earned $2.21 per diluted share, down from $2.35 per diluted share in the same quarter last year.
Analysts on average had expected an adjusted profit of $2.38 per share, according to estimates compiled by financial markets data firm Refinitiv.
The miss was largely because of the "precipitous drop" in its financial markets revenues, said Barclays analyst John Aiken in a note.聽
The bank also saw expenses grow 8.6 per cent, or 6.7 per cent adjusted, driven by technology costs.聽
It said it was maintaining cost discipline across the bank amid lingering macro uncertainty, including through a reduction in full-time equivalent employees and managing new hires and vacancies.聽
Full-time equivalent employees were down by 227 in the third quarter to 18,821 from the first-quarter peak of 19,048. The total head count is still higher than the 18,502 level in the third quarter last year.聽
National Bank said its personal and commercial banking business earned $328 million in its third quarter, up from $319 million a year earlier as revenue growth was offset in part by higher non-interest expenses and higher provisions for credit losses.
The bank's wealth management business earned $183 million in its latest quarter, up from $175 million in the same quarter last year. National Bank's U.S. specialty finance and international business earned $128 million in its third quarter, up from $125 million a year earlier.
The bank's "other" category reported a loss of $5 million in the quarter compared with a loss of $72 million in the same quarter last year.
This report by The Canadian Press was first published Aug. 30, 2023.
Companies in this story: (TSX:NA)
The Canadian Press
