Shares of National Bank of Canada rose on Friday following the release of their latest quarterly earnings report. The bank’s earnings exceeded expectations, leading to an increase in shareholder returns through a higher dividend payout and a share buyback program.
Share performance and highlights
In morning trading, National Bank of Canada shares were up 4.1% at C$93.58, outperforming other major Canadian banks which saw mostly lower stock prices. The bank’s stock has experienced a 2.6% increase since the beginning of the year.
Impressive financial results
For the fourth quarter, National Bank of Canada recorded earnings of C$768 million, or C$2.14 per share, compared to C$738 million, or C$2.08 per share, in the same period last year. Adjusted per-share earnings came in at C$2.44, surpassing the consensus estimate of C$2.26 from analysts polled by FactSet.
The bank’s overall revenue reached C$2.59 billion, slightly lower than the market forecast of C$2.64 billion. Notably, National Bank’s financial markets segment saw a significant increase in revenue, contributing to the overall growth.
Positive outlook and analyst comments
National Bank stands out among its peers due to its ability to manage expense inflation better than most other banks. Additionally, provisions for credit losses in the quarter were lower than anticipated by both analysts and the market. The bank’s provision for credit losses rose to C$115 million from C$87 million the previous year.
Boosting shareholder returns
To reward its shareholders, National Bank announced a 3.9% increase in its quarterly dividend to C$1.06 per share. The bank’s board also approved a share repurchase program which allows for the buyback of up to 7 million shares.