National Bank of Canada More Than Doubles Q2 Profits, Beats Estimates; Equities down 3%


Shares from the National Bank of Canada (N / A) fell 3% in early trading on Friday, even after Canada’s sixth-largest bank posted better-than-expected second-quarter profits, on lower credit loss provisions and strong financial markets.

Profit was C $ 801 million (C $ 2.25 per diluted share) for the second quarter of 2021, beating analysts’ estimates of C $ 2.00 per share. Second quarter 2020 earnings were C $ 379 million (C $ 1.01 per diluted share).

In addition, sales were as estimated at nearly C $ 2.2 billion, up 10% from C $ 2 billion in the previous year quarter.

Profits at National Bank’s personal and commercial banking division more than quintupled to C $ 321 million. The bank received a boost from its domestic market in Quebec, where strong demand for housing is supporting mortgage loans.

In addition, earnings at his wealth management business rose 17% to C $ 165 million in the quarter, on the strength of the stock markets.

Finally, net income from the bank’s financial markets activity increased 50% to C $ 238 million in the last quarter.

Provisions for credit losses during the quarter fell to C $ 5 million, compared to C $ 504 million in the same quarter last year. (See the National Bank of Canada’s stock market analysis on TipRanks)

The President and Chief Executive Officer of the National Bank, Louis Vachon, declared: “For the second quarter of 2021, the Bank achieved another solid performance. We continue to operate in an improving economic environment more conducive to business growth, with our momentum in the first quarter continuing into the second. once again reflect the fact that we made the right strategic choices and built a strong, diverse and agile franchise. With a leading ROE, high capital levels and prudent provisions for credit losses, we are well positioned to selectively seize growth opportunities as we gradually emerge from the pandemic. ”

Following the results, Canaccord Genuity analyst Scott Chan maintained a Hold rating on NA with a price target of C $ 94.50, with no upside potential.

The Rest of the Street is cautiously bullish on NA with a moderate buy consensus rating based on 3 buys and 4 takes. The analysts’ average price target of C $ 93.92 implies a potential downside of 1% from current levels.

TipRanks smart score

NA scores 6 out of 10 on TipRanks’ Smart Score rating system, indicating that stock returns are likely to be in line with the overall market.

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