UPDATE 3-National Bank of Canada says no plans for capital raise

Wed Jun 1, 2016 3:22pm EDT
 
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* CEO says equity issue would be 'last resort'

* Q2 net income C$210 million vs C$404 million

* C$183 million set aside for oil and gas loan losses (Recasts, adds CEO comments from conference call)

TORONTO, June 1 (Reuters) - National Bank of Canada said on Wednesday it had no plans to raise capital from shareholders after its second-quarter profit nearly halved as clients in the oil and gas industry struggled to repay loans.

Canada's sixth-biggest lender raised C$300 million through a share offering last October after its core tier 1 ratio, a key measure of financial strength, fell to the 9.5 percent minimum required by the country's financial regulator.

That capital raise helped it improve the ratio to 9.8 percent at the end of April.

The bank warned last month that it needed to set aside C$250 million, or C$183 million after tax, to cover bad loans to oil and gas firms, again raising questions about its capital strength.

Chief Executive Louis Vachon said on Wednesday the bank had set a target for its core tier 1 ratio to hit 10 percent by the end of 2017 at the latest but was not planning to tap shareholders again to achieve that goal.

"At this stage we do not plan (an equity issue)," he told analysts on a conference call. "We think we can do that organically without having to do an equity issue and the equity issue I can assure you would be the very, very last option that we would look at."   Continued...