May 31, 2012 / 1:07 PM / 5 years ago

UPDATE 1-National Bank of Canada raises div as profit beats

* Ex-items EPS C$1.95 vs est. C$1.86

* Core profit up 6 pct, net income boosted by Natcan sale

* Raises dividend by 5 pct

* Launches 2 pct share buyback

May 31 (Reuters) - National Bank of Canada quarterly core profit rose a stronger-than-expected 6 percent on consumer loan and mortgage growth, and the company raised its quarterly dividend.

Excluding a C$198 million gain from the sale of the Natcan investment management unit and other one-time items, income rose to C$347 million, or C$1.95 a share, for the fiscal second quarter ended April 30, from C$327 million, or C$1.78, a year earlier, the bank said on Thursday.

The result topped analysts’ average forecast for a profit of C$1.86 a share, according to Thomson Reuters I/B/E/S. Return on equity excluding items was 21.3 percent.

The bank agreed to sell Natcan in February to asset manager Fiera Capital for about C$310 million in cash and stock.

Including one-time items, National’s net income rose 69 percent to C$553 million.

The Montreal-based bank raised its quarterly dividend to 79 Canadian cents from 75 Canadian cents, the only one of Canada’s six biggest banks to do so this quarter.

It also announced a normal course issuer bid for up to 2 percent of its outstanding shares.

Personal and Commercial banking income rose 14 percent to C$166 million in the quarter, driven by stronger consumer loans and mortgages.

Excluding the Natcan gain, wealth management profit slid to C$41 million from C$49 million.

Core financial markets profit slipped to C$126 million from C$127 million.

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