National Bank of Canada posted record results in the third quarter, boosted by strong earnings in its wealth management and financial markets segments. The country’s sixth largest lender said it saw an 11% year-over-year rise in overall net profit, to $419 million, in the period.
In the wealth segment, the bank said net income totalled $52 million in the third quarter of 2013, up 33% from the same quarter of 2012. Excluding specified items related to the past two years’ acquisitions – which prominently included Wellington West and HSBC Securities – the division’s third-quarter revenues were up 9% at $289 million, an increase that was driven by a rise in deposits and higher fee-based revenues.
“Thanks to sustained growth across its three business segments, National Bank reported record net income in the third quarter of 2013. Our credit quality and financial strength remain excellent, and our Pan-Canadian growth strategy has paid off with strong performance in the Wealth Management and Financial Markets segments," said Louis Vachon, president and chief executive. "Furthermore, the Bank continues to seek out opportunities, as was the case for the acquisition of TD Waterhouse Institutional Services.”
Excluding extraordinary items – particularly the $246 million gain on the sale of Natcan Investment Management operations in second quarter of 2012 – the wealth management segment posted net income of $172 million for the first nine months of 2013 compared to $139 million in the same period of 2012. The bank said the rise came mainly from greater retail brokerage activity, higher sales of managed solutions and growth in net interest income.
National Bank has been keen to expand beyond its Quebec home turf and grow its wealth and financial markets businesses. As well as the Wellington and HSBC acquisitions, National recently agreed to buy TD’s institutional services business for $250 million.
In the third quarter, National’s income from its financial markets business was up 42%, while income from its personal and commercial segments rose a slight 2%.