National Bank posted lower adjusted profits for its third quarter on Wednesday, reflecting a notable decline in its financial markets division and an increase in provisions for bad debts.
Despite the bank’s “solid results”, its financial markets segment faced a “less favorable context”, National CEO Laurent Ferreira said in a statement. National Bank said its capital markets operations brought in $205 million in its latest quarter, down from $279 million in the third quarter of 2022. It blamed the decline on lower trading activity and volatility. exceptionally weak markets.
Overall, the Montreal bank recorded net income of 839 million, or $2.36 per share, for the quarter ended July 31, an increase from that of 826 million, or $2.35, of the same period a year earlier. On an adjusted basis, excluding a non-recurring item, National’s net income was $790 million or $2.21 per share, down 4% from $826 million or $2.35 per share .
Analysts on average had expected adjusted earnings of $2.38 per share, according to forecasts compiled by financial data firm Refinitiv. This lower-than-expected result is largely attributable to the “precipitous fall” in revenues in financial markets, Barclays analyst John Aiken said in a note.
The bank also saw its expenses increase by 8.6%, or 6.7% when adjusted, due to technology costs. She said she was maintaining cost discipline at the bank amid continued macroeconomic uncertainty, including reducing the number of full-time equivalent employees and managing new hires and vacancies.
The number of full-time equivalent employees fell by 227 in the third quarter, to 18,821, from a peak of 19,048 in the first quarter. The total number of employees remains above the level of 18,502 people recorded in the third quarter of last year.
National Bank said its personal and commercial banking operations brought in $328 million in the third quarter, up from $319 million a year earlier, as revenue growth was partially offset by higher non-interest expense and provisions. for credit losses.
The bank’s wealth management business generated $183 million in its most recent quarter, compared with $175 million in the same quarter last year. National Bank’s specialized and international financing activities in the United States earned $128 million in the third quarter, up from $125 million in the previous third quarter.
The bank’s “other” business category recorded a loss of $5 million in the quarter, compared to a loss of $72 million in the same period a year earlier.
With The Canadian Press
