National Bank boosts dividend as profit up
Bank surpasses estimates, more than doubling earnings
MONTREAL— National Bank of Canada is raising its quarterly dividend following a second-quarter profit that more than doubled to $484 million, beating analyst estimates.
The country’s sixth-largest bank said Wednesday that its net income amounted to $1.28 per diluted share, up from 52 cents per share or $210 million in last year’s second quarter.
Its dividend will increase by two cents per share or 3.6 per cent to 58 cents per share, starting with the Aug. 1 payment.
“Each business segment posted double-digit earnings growth, contributing to the bank’s excellent performance for the second quarter of 2017,” CEO Louis Vachon stated.
Revenue for the period ended April 30 was up 12 per cent to just under $1.6 billion.
In addition to the dividend hike, the bank announced it may also buy back up to 1.8 per cent of its shares from the open market.
The Montreal-based bank also improved its tier 1 capital ratio to 10.8 per cent, from 10.1 per cent the end of October.
Last year’s second quarter included a $183-million after-tax provision for credit losses for oil and gas and ser- vice company loans.
Excluding one-time items, the Montreal-based bank earned $492 million or $1.30 per share, up from $237 million or 60 cents per share in the prior year quarter.
National Bank was expected to earn $1.26 per share in adjusted profits on $1.63 billion of revenues, according to analysts polled by Thomson Reuters.
John Aiken of Barclays Capital says more important than the strong results are the increased capital ratio and share buyback which continues to ease investor concerns.
“We believe that this should go a long way to further ease the overhang related to unease in its relative capital levels and we would expect to see some outperformance on the stock coming out of the quarter,” he wrote in a report.