* Ups dividend by 6.5 pct, earlier than some had expected
* Strong profits top estimates, boost other bank shares
TORONTO, Dec 1 (Reuters) - Shares of National Bank of Canada (NA.TO) climbed more than 2 percent to touch a record high on Wednesday after the company reported a stronger than expected quarterly profit and raised its dividend for the first time in three years.
The dividend hike — the bank raised its quarterly payout by 4 Canadian cents to 66 Canadian cents — makes National the first major Canadian lender to resume dividend increases in the wake of the financial crisis.
Canada’s banking regulator recently gave the all-clear to the banks to resume big capital payouts such as dividend hikes following a virtual two-year ban, but some analysts had expected the bank to wait before making the move.
“We expected National Bank would be among the first to raise its dividend but we were expecting an increase in (first quarter 2011),” RBC Capital Markets analyst Andre-Philippe Hardy said in a research note.
By mid-morning, the bank’s shares were up C$1.47 at C$69.31, and earlier touched a record high of C$69.73.
Other Canadian bank stocks were also higher, as analysts said National’s strong retail bank profit suggested similarly strong results from Canada’s other big lenders, which report results later this week and next.
National, Canada’s No. 6 bank, earned C$287 million ($279 million), or C$1.66 a share, in the quarter. That was up from a year-before profit of C$241 million, or C$1.39 a share.
Excluding items, adjusted profit was C$1.63 a share, topping analysts’ expectations for a profit of C$1.57 a share, according to Thomson Reuters I/B/E/S.
The Toronto Stock Exchange’s S&P/TSX financials index .SPTTFS was up 1.5 percent at midmorning on Wednesday, the second-strongest sector on the broader TSX composite .GSPTSE.
$1=$1.02 Canadian Reporting by Cameron French; editing by Peter Galloway