National Bank reports record income in 3rd quarter
Montreal bank's results exceed analysts' expectations
National Bank is reporting what it calls record results for the third quarter with per share earnings that beat analyst estimates.
The Montreal-based bank reported Wednesday that it earned $419 million, or $2.39 per diluted share, in net income in the latest period, up from $379 million, or $2.14, in the same period last year.
Revenue rose five per cent to $1.29 billion from $1.22 billion.
Ex-items, net income was a record $391 million, or $2.22 per diluted share, up 11 per cent from $353 million, or $1.98 per share, in the same 2012 period.
Growth strategy paid off
National Bank was expected to earn $2.06 per share in adjusted profits on $1.3 billion in revenues in the third quarter, according to analysts polled by Thomson Reuters.
"Thanks to sustained growth across its three business segments, National Bank reported record net income in the third quarter of 2013," president and CEO Louis Vachon said in releasing the bank's earnings report.
"Our credit quality and financial strength remain excellent, and our pan-Canadian growth strategy has paid off with strong performance in the wealth management and financial markets segments."
"Furthermore, the bank continues to seek out opportunities, as was the case for the acquisition of TD Waterhouse Institutional Services announced on Aug. 1," he said.
Earlier this month, National Bank announced it was entering into an agreement to pay $250 million for TD Waterhouse Institutional Services, which provides back-office and support solutions for portfolio managers and brokers across the country.
The deal, which is expected to close later this year, is still subject to regulatory approvals and other conditions.
National Bank said it will add 260 additional market intermediaries who serve 130,000 client accounts and manage approximately $34 billion in assets. Through its Correspondent Network, it already oversaw 350,000 client accounts with client assets of $50 billion.
The bank said the acquisition will help it increase its payout of recurring earnings per share by 12 cents in 2014, and 14 cents the year after.
National Bank is Canada's sixth-largest bank, with about $185 billion in assets and close to 20,000 employees across the country.
National Bank is the third large Canadian bank to report this week. Scotiabank and Bank of Montreal both reported Tuesday. Royal Bank, Toronto-Dominion and CIBC report on Thursday.