National Bank of Canada stock surges on profit beat
By Cameron French
TORONTO (Reuters) - National Bank of Canada (NA.TO: Quote) reported a stronger-than-expected 10.6 percent rise in quarterly profit on the back of higher wealth management and trading income, pushing its stock to a two-year high on Wednesday.
The shares of the country's sixth-largest bank, the third Canadian lender to report results for the quarter, were up 2.7 percent at C$81.39 in Toronto, their highest since May 2011.
Net income rose to C$419 million ($398.84 million), or C$2.39 per share, in the third quarter ended July 31, from C$379 million, or C$2.14 per share, a year earlier.
Excluding a C$37 million reversal of income tax provisions, and other items, earnings rose to C$2.22 a share from C$1.98. That was well ahead of the profit of C$2.06 analysts expected, according to Thomson Reuters I/B/E/S.
The news follows market-beating results from larger rivals Bank of Montreal (BMO.TO: Quote) and Bank of Nova Scotia BNS.TO on Tuesday.
"The earnings are going really well right now ... Long term, banks are attractive," said Jason Donville, chief executive of Donville Kent Asset Management Inc.
But while those banks topped estimates mainly because of strong domestic lending income, National benefited from its proportionally large financial markets division, which includes trading, investment banking, and other advisory services.
"The earnings beat was driven by trading revenues and fee income," CIBC World Markets analyst Robert Sedran said in a research note. Continued...