National Bank of Canada has reported impressive financial results for the fourth quarter, surpassing analyst expectations. The bank’s profit increased by 11% to reach CAD 1.1 billion, or CAD 2.57 per share, for the three months ending October 31. When adjusted for special items, including costs from the acquisition of Canadian Western Bank, earnings rose to CAD 2.82 per share, exceeding the anticipated CAD 2.62.
Strong Financial Performance
National Bank’s chief executive officer, Laurent Ferreira, highlighted the institution’s strong financial performance and the successful completion of its largest acquisition. He emphasized that the bank met all medium-term financial goals while establishing a more robust national presence and diversified business mix.
Dividend Increase Announced
In light of its strong performance, National Bank has raised its quarterly dividend by CAD 0.06, bringing it to CAD 1.24 per share. The bank’s ability to increase dividends demonstrates confidence in its ongoing growth trajectory.
Recent Acquisitions and Growth Strategies
- National Bank announced plans to acquire Laurentian Bank of Canada’s retail and small-business banking assets.
- Fairstone Bank of Canada will purchase all common shares of Laurentian at CAD 40.50 per share.
These strategic moves are expected to enhance National Bank’s growth, particularly outside Quebec, as it seeks to solidify its market presence across Canada.
Quarterly Financial Highlights
| Category | Q4 2023 | Q4 2022 |
|---|---|---|
| Profit | CAD 1.1 billion | CAD 991 million |
| Earnings per Share | CAD 2.57 | CAD 2.31 |
| Adjusted Earnings per Share | CAD 2.82 | CAD 2.55 |
| Total Revenue | CAD 3.7 billion | CAD 2.9 billion |
| Provisions for Credit Losses | CAD 244 million | CAD 162 million |
| Capital Markets Earnings | CAD 432 million | CAD 306 million |
Total revenue for the quarter surged 26% to CAD 3.7 billion. This growth was primarily attributed to increased earnings in capital markets and wealth management. However, expenses rose by 31% to CAD 2.1 billion, driven by integration costs related to the CWB acquisition and rising compensation costs.
Sector Performance
In the personal and small business banking sector, profit dipped by 2% to CAD 319 million as higher revenues were counterbalanced by rising non-interest expenses and provisions for credit losses. Conversely, the wealth management division saw an 18% profit increase to CAD 258 million, thanks to higher loan volumes and fee-based revenues. Capital markets earnings experienced a substantial 41% boost to CAD 432 million.
Overall, National Bank continues to show resilience and strong performance, setting the stage for ongoing growth in a challenging economic landscape.
