National Bank posts higher profit and hikes dividend

National Bank of Canada (NA.TO) reported a 14 percent increase in adjusted quarterly profit to $330 million (91 Canadian cents per share), up three percent from $320 million in 2013.

The Montreal-based bank’s financial markets and wealth management businesses both performed exceedingly well.

National Bank, along with Royal Bank of Canada, are the two only major Canadian banks that have met or exceeded fourth quarter profit expectations.

The bank posted earnings of C$1.14 per share, in line with the average analyst estimate, according to Thomson Reuters I/B/E/S.

The bank announced that its dividend will increase by about four percent to 50 cents per common share. This is the third time that National Bank has increased its dividend over the past year.

National Bank’s main personal and commercial lending business saw a 7 percent increase to C$178 million.

The bank’s wealth management business posted net income of C$80 million in the wealth management business and C$150 million in its financial markets division.

National Bank

“The wealth management and financial markets segments were especially impressive, achieving year-over-year earnings growth of more than 20 per cent,” stated president and CEO Louis Vachon.

In its fourth quarter that bank faced $57 million in provisions for credit losses, up $9 million from the year before, mainly because of losses on business loans.

“Although National could not escape the pressures facing all the banks on the capital markets front, we note that it continues to perform quite well within its retail banking operations,” stock analyst John Aiken said of the bank’s performance during the quarter.