Updated February 28th, 2024 at 19:03 IST

National Bank of Canada Q1 revenue jumps 10% on financial markets strength

Provisions for credit losses rose from C$86 million to C$120 million amid economic uncertainty and higher borrowing costs, potentially increasing delinquencies.

Reported by: Business Desk
National Bank of Canada | Image:Shutterstock
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NA.TO's Q1 growth: National Bank of Canada, listed as NA.TO, disclosed an uptick in its first-quarter earnings, primarily attributed to a strong showing in its financial markets division, which offset the impact of increased provisions for potential loan losses. The financial markets segment experienced a notable revenue surge of 10 per cent, reaching C$755 million ($556.09 million) for the quarter.

However, the bank's provisions for credit losses escalated from C$86 million to C$120 million, reflecting concerns over an uncertain economic climate and higher borrowing costs, which could lead to a rise in delinquent borrowers. Moreover, the advantage derived from elevated interest rates waned as banks allocated more resources to retain depositors amidst competitive alternatives, resulting in a 31.7 per cent decrease in net interest income to C$751 million. 

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Nevertheless, the bank's net income rose to C$922 million ($678.99 million), or C$2.59 per share, compared to C$876 million, or C$2.47 per share, in the corresponding period last year.

(With Reuters Inputs)

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Published February 28th, 2024 at 19:01 IST