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National Bank releases its results for the First Quarter of 2013

The financial information in this press release is based on the unaudited 
interim consolidated financial statements for the first quarter ended January 
31, 2013. Additional information about National Bank of Canada, including the 
Annual Information Form, can be obtained from the SEDAR website at sedar.com 
or on Bank's website at nbc.ca. 
Highlights: 


    --  $364 million in net income for the first quarter of 2013, up 4%
        from $351 million in the same quarter of 2012;
    --  Diluted earnings per share of $2.03 for the first quarter of
        2013, up 2% from $1.99 in the same quarter of 2012;
    --  Return on equity of 20.0%;
    --  As at January 31, 2013, the Common Equity Tier 1 (CET1) capital
        ratio under Basel III was 7.9% versus a pro forma CET1 ratio
        under Basel III of 7.3% as at October 31, 2012.

Highlights Excluding Specified Items((1)):
    --  A record $361 million in net income for the first quarter of
        2013, up 2% from $353 million in the same quarter of 2012;
    --  Record diluted earnings per share of $2.02 for the first
        quarter of 2013, up 1% from $2.00 in the same quarter of 2012;
    --  Return on equity of 19.8%.

MONTREAL, Feb. 28, 2013 /CNW Telbec/ - National Bank reports $364million in 
net income for the first quarter of 2013, a 4% increase from $351million in 
the first quarter of 2012. Diluted earnings per share for the quarter ended 
January31, 2013 stood at $2.03, up 2% from $1.99 in the same quarter of 2012.

Excluding the specified items described on page 5, this quarter's net income 
was a record amount of $361million, up 2% from $353million in the same 
quarter of 2012, and the quarter's diluted earnings per share was a record 
$2.02, up 1% from $2.00 in the same quarter of 2012.

"The first quarter results were driven by excellent performance in the Wealth 
Management segment and the Personal and Commercial segment, whose earnings 
rose 24% and 5%, respectively," said Louis Vachon, President and Chief 
Executive Officer of the Bank. "The Bank is continuing to invest in 
improvements to client service delivery and operational effectiveness—key 
advantages in periods of moderate economic growth. Furthermore, the Bank will 
maintain its sound management of costs, risk and capital," added Mr.Vachon.

Financial Indicators
                                                  Results      
                                                excluding      
                                      Results   specified      
                                      Q1 2013       items ((1))
                                                           

Growth in diluted earnings per share        2 %         1     %

Return on common shareholders' equity    20.0 %      19.8     %

Dividend payout ratio                      33 %        40     %

CET1 capital ratio under Basel III        7.9 %                

(1) See the Financial Reporting Method section on page 5.

Results by Segment

The Bank's segment reporting is consistent with that adopted for the year 
beginning November 1, 2012, with the following changes having been made to 
better reflect how management monitors performance. The distribution of 
banking products through independent networks has been reclassified from the 
Personal and Commercial segment to the Wealth Management segment. Banking 
activities with energy sector companies have been transferred from the 
Financial Markets segment to the Personal and Commercial segment. These 
changes had no impact on the Bank's consolidated results.

Personal and Commercial
In the Personal and Commercial segment, first-quarter net income totalled 
$178million compared to $169million in the first quarter of 2012, a 5% 
year-over-year increase that came from sustained growth in business activity 
and a stringent control of non-interest expenses. The segment's first-quarter 
total revenues increased by $16million as net interest income rose by 
$3million and non-interest income by $13million. The higher net interest 
income came mainly from growth in personal loan volume, tempered by a narrower 
net interest margin, which was 2.14% in the first quarter of 2013 compared to 
2.34% in the same quarter of 2012, mainly due to a decline in loan spreads. 
The growth in non-interest income was mainly due to credit fees and insurance 
revenues.

Personal Banking's total revenues rose $8million, mainly due to higher loan 
volume, especially consumer loans and home equity lines of credit, partly 
offset by narrower net interest margins. Credit fees and insurance revenues 
were also up. Commercial Banking's total revenues rose $8million, owing 
mainly to higher credit fees, particularly on acceptances.

The Personal and Commercial segment's first-quarter non-interest expenses 
increased $5million or 1% year over year. At 55%, the efficiency ratio for 
the first quarter of 2013 improved by 1% when compared to the same quarter of 
2012. Provisions for credit losses were reduced by $1million, as lower 
provisions for losses on business loans and credit card receivables were more 
significant than the higher provisions on personal credit losses.

Wealth Management
In the Wealth Management segment, net income totalled $51million in the 
first quarter of 2013, up 24% from $41million in the same quarter of 2012. 
First-quarter total revenues amounted to $275million versus $262million in 
the first quarter of 2012, a 5% increase that was mainly due to a greater 
volume of fee-based service transactions, growth in assets under 
administration and under management, and the CashPerformer account.

At $205million, first-quarter non-interest expenses remained stable year 
over year.

Financial Markets
In the Financial Markets segment, net income totalled $115million for the 
first quarter of 2013, down $6million from $121million in the same quarter 
of 2012. On a taxable equivalent basis, the segment's first-quarter total 
revenues amounted to $303million compared to $337million in the first 
quarter of 2012, mainly attributable to net gains on available-for-sale 
securities, which were $29million lower given the investing activity gains 
that had been realized in the first quarter of 2012. Banking service revenues 
rose 26%, mainly due to greater financing needs of clients carrying out 
acquisitions, while other income was down $7million, mainly due to a lower 
share in the income of an associate.

For the first quarter of 2013, non-interest expenses were down $12million 
year over year as a result of variable compensation. During the first quarter 
of 2013, $13million in credit losses was recovered, whereas in the same 
quarter of 2012, no provisions for credit losses had been taken.

Other 
For the Other heading of segment results, first-quarter net income totalled 
$20million, stable when compared to the same quarter of 2012. The specified 
items for the first quarter of 2013, net of income taxes, included $9million 
in revenues related to holding restructured notes compared to $3million in 
the first quarter of 2012. Excluding specified items, net income was down 
$5million, mainly due to a lower contribution from Treasury in the first 
quarter of 2013.

Capital

The Bank considers credit risk, operational risk and market risk in its 
approach to managing capital. The Bank uses the Advanced Internal Rating-Based 
Approach to manage credit risk and the Standardized Approach for operational 
risk. For market risk, the Bank mainly uses an approach based on internal 
models but uses the Standardized Approach for certain exposures. Additional 
information is provided in the Capital Management section on pages 54 to 56 of 
the 2012 Annual Report.

The new regulatory framework, referred to as Basel III, sets out transitional 
arrangements for the period of 2013 to 2019. However, OSFI is requiring 
Canadian banks to meet the 2019 minimum requirements as of the first quarter 
of 2013 for Common Equity Tier 1 (CET1) and by the first quarter of 2014 for 
Tier 1 capital and total capital. These target ratios, called 
"all-in"ratios, will be presented alongside the ratios calculated on a 
transitional basis for each quarter until the start of 2019. Because the Bank 
must comply with the «all-in» ratios, it must maintain, as of the first 
quarter of 2013, a CET1 ratio of at least 7.0%, 4.5% for common equity and 
2.5% for a capital conservation buffer.

In addition to regulatory capital ratios, OSFI also requires banks to meet an 
assets-to-capital multiple test. The assets-to-capital multiple is calculated 
by dividing the Bank's total assets, including certain off-balance-sheet 
items, by its regulatory capital.

According to OSFI's capital adequacy guidelines, financial institutions could 
elect to phase in the impact of converting to IFRS on their regulatory 
capital. The Bank had decided to use this election and phased in the 
IFRS-conversion impact on a straight-line basis over a five-quarter period 
starting from the first quarter of 2012 up to and including the first quarter 
of 2013.

As at January 31, 2013, the CET1 capital ratio under Basel III, on an "all-in" 
basis, was 7.9% versus a pro forma CET1 ratio under Basel III of 7.3% as at 
October31, 2012. The higher CET1 ratio is essentially due to a delay in 
implementing the new Credit Valuation Adjustment (CVA) charge, to the common 
share issuance related primarily to exercised stock options, and to net 
income, net of dividends. The Tier 1 capital ratio and the total capital 
ratio, under Basel III on an "all-in" basis, were 10.8% and 14.5%, 
respectively as at January 31, 2013 versus the respective pro forma ratios of 
10.1% and 14.1% as at October31, 2012.

The risk-weighted assets calculated under the rules of Basel III on an 
"all-in" basis, totalled $59.4billion as at January 31, 2013 versus 
$62.2billion on a pro forma basis as at October31, 2012, the decrease 
being attributable to the delay in implementing the CVA.

HIGHLIGHTS

(millions of Canadian dollars) 

Quarter ended January 31           2013            2012     % Change
                                                             

Operating results                                                   

Total revenues            $       1,235     $     1,243          (1)

Net income                          364             351            4

Net income attributable                                    
to the Bank's
shareholders                        344             332            4

Return on common                        %               %  
shareholders' equity               20.0            21.9             

Earnings per share                                         
(dollars)                                                           

  Basic                   $        2.05     $      2.00            2

  Diluted                          2.03            1.99            2
                                                             

EXCLUDING SPECIFIED ITEMS                                  
((1))                                                               

Operating results                                                   

Total revenues            $       1,225     $     1,238          (1)

Net income                          361             353            2

Net income attributable                                    
to the Bank's
shareholders                        341             334            2

Return on common                        %               %  
shareholders' equity               19.8            22.1             

Earnings per share                                         
(dollars)                                                           

  Basic                   $        2.04     $      2.01            1

  Diluted                          2.02            2.00            1
                                                             

Per common share                                           
(dollars)                                                           

Dividends declared        $        0.83     $      0.75             

Book value                        41.38           36.87             

Stock trading range                                                 

  High                            80.04           77.94             

  Low                             75.06           63.27             

  Close                           79.32           75.22             
                                                                    
                          As at January           As at    
                                    31,     October 31,
                                   2013            2012     % Change
                                                             

Financial position                                                  

Total assets                    183,796         177,903            3

Loans and acceptances            92,721          90,922            2

Deposits                         93,899          93,249            1

Subordinated debt and                                      
equity                           10,939          10,710            2

Capital ratios under                                       
Basel III((2))                                                      

  Common Equity Tier 1                  %           7.3 %           
  (CET1)                            7.9                    

  Tier 1                           10.8 %          10.1 %           

  Total                            14.5 %          14.1 %           

Capital ratios under                                       
Basel I                                                             

  Tier 1                           11.2 %          11.0 %           

  Total                            15.0 %          14.6 %           

Impaired loans, net of                                     
individual and collective
allowance                         (202)           (190)             

  As a % of loans and                   %         (0.2) %           
  acceptances                     (0.2)                    

Assets under                                               
administration/management       242,096         232,027             

Total personal savings          152,210         149,774             

Interest coverage                 12.35           12.23             

Asset coverage                     3.56            3.45             
                                                             

Other information                                                   

Number of employees              19,858          19,920      −

Number of branches in                                      
Canada                              452             451      −

Number of banking                                          
machines                            922             923      −

(1) See the Financial Reporting Method section on page 5.

(2) Ratios are presented on an "all-in" basis and the October 31, 2012
    ratios are presented on a pro forma basis.

FINANCIAL REPORTING METHOD

(millions of Canadian dollars)  

When assessing its results, the Bank uses certain measures that do not comply 
with International Financial Reporting Standards (IFRS), as issued by the 
International Accounting Standards Board (IASB) and set out in the Canadian 
Institute of Chartered Accountants Handbook. Securities regulators require 
companies to caution readers that net income and other measures adjusted using 
non-IFRS criteria are not standard under IFRS and cannot be easily compared 
with similar measures used by other companies.

FINANCIAL INFORMATION

Quarter ended January 31                 2013         2012     % Change
                                                                  

Excluding specified items                                              

  Personal and Commercial                 178          169            5

  Wealth Management                        56           46           22

  Financial Markets                       115          121          (5)

  Other                                    12           17             

Net income excluding specified items      361          353            2

  Less: Acquisition-related items(                            
  (1))                                    (6)          (5)             

  Plus: Items related to holding                              
  restructured notes((2))                   9            3             

Net income                                364          351            4
                                                                  

Diluted earnings per share excluding             
specified items                      $   2.02     $   2.00            1

  Less: Acquisition-related items(                            
  (1))                                 (0.04)       (0.03)             

  Plus: Items related to holding                              
  restructured notes((2))                0.05         0.02             

Diluted earnings per share           $   2.03     $   1.99            2
                                                                  

Return on common shareholders'                   
equity                                                                 

  Including specified items              20.0 %       21.9 %           

  Excluding specified items              19.8 %       22.1 %           

(1) For the first quarter ended January 31, 2013, the
    acquisition-related items consisted of: $6 million ($4 million net
    of income taxes) in charges incurred for the Wealth Management
    acquisitions (2012: $8 million, $5 million net of income taxes),
    made up essentially of retention bonuses; the Bank's $1 million
    share ($1 million net of income taxes) in the integration charges
    incurred by Fiera; and the Bank's $1 million share ($1 million net
    of income taxes) in intangible asset amortization and integration
    charges related to its interest in TMX.

(2) During the quarter ended January 31, 2013, $12 million in revenues
    ($9 million net of income taxes) was recorded to reflect a change
    in the fair value of commercial paper not included in the
    Pan-Canadian restructuring plan (2012: $5 million, $3 million net
    of income taxes).

CAUTION REGARDING FORWARD-LOOKING STATEMENTS


From time to time, National Bank of Canada (the Bank) makes written and oral 
forward-looking statements, such as those contained in the Major Economic 
Trends and the Outlook for National Bank sections of the 2012 Annual Report, 
in other filings with Canadian securities regulators, and in other 
communications, for the purpose of describing the economic environment in 
which the Bank will operate during fiscal 2013 and the objectives it has set 
for itself for that period. These forward-looking statements are made in 
accordance with the current securities legislation. They include, among 
others, statements with respect to the economy—particularly the Canadian and 
U.S. economies—market changes, observations regarding the Bank's objectives 
and its strategies for achieving them, Bank projected financial returns and 
certain risks faced by the Bank. These forward-looking statements are 
typically identified by future or conditional verbs or words such as 
"outlook," "believe," "anticipate," "estimate," "project," "expect," "intend," 
"plan," and similar terms and expressions. 
By their very nature, such forward-looking statements require assumptions to 
be made and involve inherent risks and uncertainties, both general and 
specific. Assumptions about the performance of the Canadian and U.S. economies 
in 2013 and how that will affect the Bank's business are among the main 
factors considered in setting the Bank's strategic priorities and objectives 
and in determining its financial targets, including provisions for credit 
losses. In determining its expectations for economic growth, both broadly and 
in the financial services sector in particular, the Bank primarily considers 
historical economic data provided by the Canadian and U.S. governments and 
their agencies. 
There is a strong possibility that express or implied projections contained in 
these forward-looking statements will not materialize or will not be accurate. 
The Bank recommends that readers not place undue reliance on these statements, 
as a number of factors, many of which are beyond the Bank's control, could 
cause actual future results, conditions, actions or events to differ 
significantly from the targets, expectations, estimates or intentions 
expressed in the forward-looking statements. These factors include credit 
risk, market risk, liquidity risk, operational risk, regulatory risk, 
reputation risk, and environmental risk (all of which are described in greater 
detail in the Risk Management section that begins on page 57 of the 2012 
Annual Report); the general economic environment, and financial market 
conditions in Canada, the United States and certain other countries in which 
the Bank conducts business, including the effects of the debt crisis in 
certain European countries; the lowering of the U.S. long-term sovereign debt 
rating by Standard & Poor's; the lowering of the sovereign debt rating of 
certain European countries and the impact of changes that affect the Bank's 
credit ratings; the situation with respect to the restructured notes of the 
master asset vehicle (MAV) conduits, in particular the realizable value of 
underlying assets; changes in the accounting policies the Bank uses to report 
its financial condition, including uncertainties associated with assumptions 
and critical accounting estimates; tax laws in the countries in which the Bank 
operates, primarily Canada and the United States; and changes to capital and 
liquidity guidelines and to the manner in which they are to be presented and 
interpreted. 
The foregoing list of risk factors is not exhaustive. Additional information 
about these factors can be found in the Risk Management and Other Risk Factors 
sections of the 2012 Annual Report. Investors and others who base themselves 
on the Bank's forward-looking statements should carefully consider the above 
factors as well as the uncertainties they represent and the risk they entail. 
The Bank also cautions readers not to place undue reliance on these 
forward-looking statements. 
The forward-looking information contained in this document is presented for 
the purpose of interpreting the information contained herein and may not be 
appropriate for other purposes. 
DISCLOSURE OF FIRST QUARTER 2013 RESULTS 
Conference Call 


    --  A conference call for analysts and institutional investors will
        be held on Friday, March 1, 2013 at 8:00 a.m. ET.
    --  Access by telephone in listen-only mode: 1-866-898-9628 or
        416-340-2217.
    --  A recording of the conference call can be heard until March 12,
        2013 by dialing 1-800-408-3053 or 905-694-9451.
        The access code is 5955220#.

Webcast
    --  The conference call will be webcast live at
        nbc.ca/investorrelations.
    --  A recording of the webcast will also be available on National
        Bank's website after the call.

Financial Documents
    --  The quarterly financial statements are available at all times
        on National Bank's website at
        nbc.ca/investorrelations.
    --  The Report to Shareholders, Supplementary Financial Information
        and a slide presentation will be available on the Investor
        Relations page of National Bank's website shortly before the
        start of the conference call.



Ghislain Parent Chief Financial Officer and Executive Vice-President Finance 
and Treasury 514-394-6807

Jean Dagenais Senior Vice-President Finance, Taxation and Investor Relations 
514-394-6233

Claude Breton Senior Director Public Affairs 514-394-8644 

Hélène Baril Senior Director Investor Relations 514-394-0296

SOURCE: National Bank of Canada

To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/February2013/28/c8501.html

CO: National Bank of Canada
ST: Quebec
NI: FIN ERN FIN CONF 

-0- Feb/28/2013 23:03 GMT


 
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