May 31, 2017 / 11:34 AM / in 3 years

UPDATE 2-National Bank of Canada's earnings beat market expectations

* EPS, excluding one-off items, C$1.30 vs C$0.60

* Core tier 1 ratio improves to 10.8 percent (Adds comment from analyst, details on capital strength)

TORONTO, May 31 (Reuters) - National Bank of Canada on Wednesday reported second quarter results which were ahead of market expectations, helped by a strong performance from its wealth management and financial markets divisions.

Canada’s sixth biggest lender reported earnings per share of C$1.28 per share, compared with C$0.52 in the same quarter a year ago. The previous year’s performance was affected by write-offs on bad loans to clients in the energy sector.

Earnings per share, excluding one-off items, increased to C$1.30 from C$0.60 a year ago. Analysts on average had expected earnings per share of C$1.26, according to Thomson Reuters I/B/E/S data.

The bank, which raised C$300 million through a share offering in October 2015 to bolster its capital strength, said that its core tier 1 capital ratio improved by 70 basis points to stand at 10.8 percent at the end of April compared with 10.1 percent at the end of October, 2016.

“National reported a strong quarter for earnings but, more importantly, continues to put capital concerns to rest with an increase in its capital ratio and moves to return capital to shareholders,” said Barclays analyst John Aiken.

National Bank said its net income increased to C$484 million ($360 million) in the quarter to April 30, compared with C$210 million a year ago.

“Each business segment posted double-digit earnings growth, contributing to the bank’s excellent performance for the second quarter of 2017,” said Chief Executive Louis Vachon.

Net income at the bank’s wealth management division rose by 27 percent to C$99 million. Net income at its financial markets business increased 17 percent to C$175 million.

$1 = 1.3455 Canadian dollars Reporting by Matt Scuffham; Editing by Chizu Nomiyama

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