August 25, 2011 / 1:52 PM / 6 years ago

Profit up at National Bank of Canada's wealth unit

* Wealth management unit earnings up 28 pct

* Asset levels rise; fee-based/transaction revenues up

* Wellington West acquisition closed on July 15

* Says 99 pct of Wellington advisers sign contracts

* Says Wellington deal synergies on time and on target

TORONTO, Aug 25 (Reuters) - National Bank of Canada (NA.TO) said on Thursday that quarterly earnings from its wealth management operations rose 28 percent, helped by higher asset levels and a rise in fee-based and transaction revenues.

The unit of Canada’s No. 6 bank had net income of C$37 million ($37.7 million) in the bank’s third quarter, ended July 31, up from C$29 million a year earlier.

Revenue rose 11 percent to C$208 million, driven by higher asset levels, which generated revenue growth from trust services and mutual funds.

The unit managed C$57 billion of institutional, retail, and mutual fund assets, up from C$50 billion a year earlier. It had C$187 billion in assets under administration, up from C$175 billion in the year-before quarter.

Commission revenues were also higher due to greater brokerage activity. Fee-based revenues rose 14 percent to C$14 million, driven by market growth earlier in the year, while transactional revenues were up 5 percent at C$3 million due to more favorable pricing at the bank’s full-service brokerage.

The higher brokerage activity, along with salary increases, led a C$9 million rise in operating expenses, for a total of C$155 million.

The Montreal-based bank said that despite the higher operating expense, the unit’s efficiency ratio improved by 320 basis points from a year earlier to 74.5 percent.

WESTERN EXPANSION

National closed a deal to buy the 82 percent of Winnipeg-based wealth manager Wellington West that it did not already own for about C$273 million on July 15. The move was aimed at increasing National’s presence outside of Quebec.

Wellington had 223 advisors in 50 branches across Canada when the deal was announced. National said that 99 percent of Wellington’s advisers, representing 99 percent of assets under administration, signed contracts with the bank.

It said that synergies from the deal were on time and on target, and that it expects to fully integrate the firm into the bank in coming quarters.

National has also been tipped as a possible buyer of HSBC’s Canadian retail brokerage, which has assets pegged between C$16 billion and C$30 billion and has a strong presence in the Canada’s western provinces. [ID:nN1E77L0G4]

National’s overall profit was up 15 percent in the quarter due to the higher income from the wealth segment, stronger loan volumes, and lower provisions for bad loans. [ID:nN1E77O06N]

National was the second of Canada’s big six banks to report results this week. [ID:nN1E77L0PK]

Bank of Montreal (BMO.TO) said on Tuesday that its wealth management operations rose 14 percent from a year earlier as new client assets and earnings from a recent U.S. acquisition helped offset lower brokerage volumes and insurance earnings. [ID:nN1E77M0DD]

$1=$0.98 Canadian Reporting by John McCrank; editing by Peter Galloway

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