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National Bank pulls back after falling investor profits

(Bloomberg) – National Bank of Canada shares fell the most in four months after its second quarter financial results disappointed investors after a week of explosive earnings from peers. also posted profits that beat expectations this week. National Bank, which generates a larger share of revenue from capital markets activities than any of the country’s six largest banks, was also hampered by a slowdown in that unit after a good quarter of one-year trading. earlier. 3% in Toronto on Friday, the biggest intraday drop since January 29. The stock had climbed 35% this year to Thursday, the largest increase among Canada’s six big banks. since the start of the year, expectations have been really high, ”Scott Chan, analyst at Canaccord Genuity Group Inc., said in an interview. “But overall, National has had pretty strong results across the board.” While National Bank’s capital markets unit net income increased 50% to C $ 238 million ($ 197 million), the gain was attributable to a reduction in the allowance for credit losses. . Unit revenue slipped 5.2% from a year earlier, when pandemic markets fueled a surge in business activity. this year helped the bank’s wealth division, with profits from the business increasing 17% to C $ 165 million last. Overall net income more than doubled to C $ 801 million, or C $ 2.25 per share, in the three months leading up to April. Compared to analysts’ average estimate of C $ 1.94 per share, net income supported a sharp decrease in provisions for credit losses. The lender set aside C $ 5 million for possible bad debts, down from C $ 504 million a year earlier and less than analysts’ average projection of C $ 81.9 million. to C $ 321 million in the second quarter. Unit revenue increased 6.6% last quarter and unit mortgage value increased 9.4% year-over-year to $ 72 billion Canadian dollars. its strength in Quebec as well as its focus on specialty sectors outside the province, including the creative industries, real estate, healthcare and technology, said CEO Louis Vachon. ”Vachon said in an interview. “We have been a constant player in the mortgage market, where we have had fairly steady growth over the past few years, and the same on the commercial side.” (Updates with CEO’s comments in the last two paragraphs.) Learn more stories like this are available at bloomberg.com



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