Quebec businesses feel confident, CEO reports

National Bank of MONTREAL Canada is benefiting from good economic conditions in Quebec, including low unemployment and resilient business confidence, chief executive Louis Vachon said Wednesday.

“We are seeing the results with higher growth in loans and deposits,” Vachon told analysts after National Bank announced a 10 per cent increase in net income for the third quarter ended July 31.

“Even with the uncertainty surrounding NAFTA, business confidence in Quebec remains high and we’re well-positioned to benefit as entrepreneurs invest in growth.”

The ongoing negotiations over the North American Free Trade Agreement attracted little attention during of 50-minute conference call with analysts, but Vachon and other bank executives repeatedly expressed cautious confidence.

Vachon said the bank is not averse to taking on risks if the potential reward is there but he noted that it has been 10 years since the last recession.

“We’re not forecasting a recession, he said. “We’re just being a little bit extra careful. And we just want to make sure that our threshold and our risk procedures are respected as we deploy capital — across all business lines ...”

Earlier Wednesday, Canada’s sixth-largest bank announced it earned $569 million or $1.52 per diluted share for the quarter ended July 31, up from a profit of $518 million $1.37 in the same quarter last year.

On an adjusted basis, National Bank earned $1.53 per diluted share for the quarter, up from an adjusted profit of $1.39 per share in the third quarter last year.

Analysts on average had expected a profit of $1.50 per share, according to Thomson Reuters Eikon.

National Bank was the fourth big Canadian lender to report improved thirdquarter profits over the past week, with only Bank of Nova Scotia reporting a year-over-year decline. Toronto-Dominion Bank issues its report on Thursday.

The bank said its personal and commercial banking group earned $248 million in the third quarter, up from $235 million in the third quarter of 2017.

The wealth management division earned $126 million for the quarter, up 22 per cent from $103 million a year ago.

About 80 per cent of wealth management’s growth in net interest income — the difference between what banks and clients pay in interest — was attributed to interest rate hikes.

Business confidence in Quebec remains high and we’re well-positioned to benefit as entrepreneurs invest in growth.