National Bank of Canada (NA), Canada’s sixth-largest bank, posted better-than-expected Q3 profits, driven by higher revenues in all business segments.
Profit came in at C$839 million for Q3 2021, up 39.4% from a profit of C$602 million in Q3 2020. (See National Bank of Canada stock charts on TipRanks)
On an adjusted basis, National Bank earned C$2.36 per diluted share in the quarter ended July 31, beating analysts’ estimates of C$2.11 per share. This compares to an adjusted profit of C$1.66 per diluted share in the same quarter last year.
Revenue was C$2.3 billion, up 15% from C$2 billion in the prior-year quarter, and slightly higher than estimates of C$2.2 billion.
Profit in National Bank’s Personal and Commercial Banking division, which is heavily focused on Quebec, rose to C$330 million, compared to C$223 million a year ago.
Its Wealth Management business profits grew 30% to C$165 million in the quarter. Finally, the bank’s Financial Markets business net income rose 21% to C$227 million in the latest quarter.
National Bank president and CEO Louis Vachon said, “The Bank’s strong performance since the beginning of the fiscal year has continued in the third quarter of 2021. The continued improvement in the economic environment was conducive to growth, as demonstrated by a sustained increase in our revenues.
“We remain focused on our strategic objectives in order to deliver solid returns for our shareholders, while maintaining prudent allowances for credit losses and a high level of capital.”
On August 25, Canaccord Genuity analyst Scott Chan maintained a Hold rating on NA and set a C$101 price target. This implies 1.7% upside potential.
The rest of the Street is cautiously optimistic on NA, with a Moderate Buy consensus rating based on five Buys and four Holds. The average National Bank of Canada price target of C$101.89 implies 2.6% upside potential to current levels.
TipRanks’ Smart Score
NA scores a 9 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock returns are likely to beat the overall market.
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