National Bank posts record results for the First Quarter of 2014

The financial information reported herein is based on the unaudited interim 
condensed consolidated financial statements for the first quarter ended 
January 31, 2014 and prepared in accordance with International Financial 
Reporting Standards (IFRS), as issued by the International Accounting 
Standards Board (IASB) and set out in the CPA Canada Handbook. The figures for 
the year ended October 31, 2013 have been adjusted to reflect changes in 
accounting standards and the impact of the stock dividend of one common share 
on each issued and outstanding common share declared on December 3, 2013. The 
effect of this dividend was the same as a two-for-one split of common shares. 
A financial information supplement issued on January 31, 2014, entitled 
"Supplementary Financial Information - Adjusted to Reflect Changes in 
Accounting Standards and the Common Stock Split" is available at nbc.ca. 
Additional information about National Bank of Canada, including the Report to 
shareholders - First Quarter 2014 and the Annual Information Form, can be 
obtained from the Bank's website at nbc.ca or on SEDAR website at sedar.com. 
MONTREAL, Feb. 24, 2014 /CNW Telbec/ - National Bank is reporting $405 million 
in net income for the first quarter of 2014 versus $373 million in the first 
quarter of 2013. Diluted earnings per share for the quarter ended January 31, 
2014 stood at $1.15, up 10% from $1.05 in the same quarter of 2013. 
Excluding the specified items described on page 4, this quarter's net income 
was a record amount of $384 million, up 12% from $344 million in the first 
quarter of 2013, and the quarter's diluted earnings per share was a record 
$1.09, up 12% from $0.97 in the same quarter of 2013. 
"First quarter results are showing strong momentum for National Bank," said 
Louis Vachon, President and Chief Executive Officer. "In Personal and 
Commercial Banking, loan and deposit growth remained strong and net interest 
margins improved on a sequential basis. Also, credit quality remained 
excellent. Wealth Management benefited from good organic growth and the 
contribution from newly acquired TD Waterhouse Institutional Services. 
Financial Markets also did well with solid client-driven activities and good 
cost control." 
Highlights: 


        --  $405 million in net income for the first quarter of 2014, up 9%
            from $373 million in the same quarter of 2013;
        --  Diluted earnings per share of $1.15 for the first quarter of
            2014, up 10% from $1.05 in the same quarter of 2013;
        --  Return on equity of 19.8%;
        --  As at January 31, 2014, the Common Equity Tier 1 (CET1) capital
            ratio under Basel III was 8.3% versus 8.7% as at October 31,
            2013.

Highlights Excluding Specified Items((1):)
        --  $384 million in net income for the first quarter of 2014, up
            12% from $344 million in the same quarter of 2013;
        --  Diluted earnings per share of $1.09 for the first quarter of
            2014, up 12% from $0.97 in the same quarter of 2013;
        --  Return on equity of 18.8%.
    Financial Indicators                                               
                                                          Results      
                                                        excluding      
                                            Results     specified      
                                            Q1 2014         items (1)  
                                                                       
    Growth in diluted earnings per share        10  %         12    %  
    Return on common shareholders' equity     19.8  %       18.8    %  
    Dividend payout ratio                       39  %         42    %  
    CET1 capital ratio under Basel III         8.3  %                  
                                                                       
    (1)    See the Financial Reporting Method section on page 4.

Personal and Commercial
        --  Net income totalled $168 million in the first quarter of 2014,
            up 3% from $163 million in the first quarter of 2013. The
            segment's contribution rose $13 million or 5%.
        --  At $658 million, first-quarter total revenues rose $19 million
            or 3% year over year.
        --  Rising 7% from a year ago, personal lending experienced
            sustained growth, with the strongest increases coming from
            consumer loans and mortgage lending, and commercial lending
            grew 5% from a year ago.
        --  The net interest margin was 2.25% in the first quarter of 2014
            versus 2.24% the preceding quarter and 2.32% in the first
            quarter of 2013.
        --  At 57.5%, the efficiency ratio improved from 58.2% in the first
            quarter of 2013.

Wealth Management
        --  The acquisition of TD Waterhouse Institutional Services (TD
            Waterhouse) was completed on November 12, 2013.
        --  First-quarter net income totalled $68 million, a 42% increase
            from $48 million in the same quarter of 2013.
        --  First-quarter total revenues amounted to $324 million versus
            $277 million in the same quarter of 2013, a $47 million or 17%
            increase that was driven particularly by growth across all
            revenue streams and by the TD Waterhouse acquisition.
        --  First-quarter non-interest expenses stood at $231 million, up
            9% year over year.
        --  Excluding specified items(1), the efficiency ratio was 68.3%,
            an improvement from 73.7% in the first quarter of 2013.

Financial Markets
        --  Net income totalled $144 million in the first quarter of 2014,
            up 27% from $113 million in the same quarter of 2013.
        --  At $365 million, revenues increased $62 million or 20% owing
            mainly to growth in trading activity revenues, gains on
            available-for-sale securities and other revenues.
        --  At $168 million, non-interest expenses increased slightly in
            the first quarter of 2014, rising $7 million year over year,
            particularly due to higher variable compensation associated
            with revenue growth.
        --  At 46.0%, the efficiency ratio improved from 53.1% in the first
            quarter of 2013.

Other 
        --  Net income totalled $25 million for the first quarter of 2014
            versus $49 million in the same quarter of 2013, a decrease that
            stems particularly from a lower contribution from Corporate
            Treasury. During the first quarter of 2014, a $33 million rise
            in the value of restructured notes was recorded, whereas a
            $26 million decrease in past services costs had been recorded
            in the first quarter of 2013 to reflect changes to the
            provisions in pension plans and other post-retirement plans
            subsequent to changes in accounting standards.

Capital Management
        --  The Common Equity Tier 1 (CET1) capital ratio under Basel III
            was 8.3% as at January 31, 2014 versus 8.7% as at October 31,
            2013.
        --  The decrease came essentially from the Wealth Management
            acquisition and from the coming into force of the credit
            valuation adjustment.
    (1)  See the Financial Reporting Method section on page 4.
    HIGHLIGHTS                                                      
    (millions of
    Canadian dollars)                                               
                                                                           
    Quarter ended                             
    January 31                        2014               2013  (1) % Change
                                                                           
    Operating results                                                      
    Total revenues       $           1,364   $           1,232           11
    Net income                         405                 373            9
    Net income                                
    attributable to the
    Bank's shareholders                389                 356            9
    Return on common                          
    shareholders' equity              19.8 %              20.7   %         
    Earnings per share                        
    (2)(dollars)                                                           
      Basic              $            1.16   $            1.06            9
      Diluted                         1.15                1.05           10
                                                                           
    EXCLUDING SPECIFIED                       
    ITEMS(3)                                                               
    Operating results                                                      
    Total revenues       $           1,326   $           1,222            9
    Net income                         384                 344           12
    Net income                                
    attributable to the
    Bank's shareholders                368                 327           13
    Return on common                          
    shareholders' equity              18.8 %              19.0   %         
    Earnings per share                        
    (2)(dollars)                                                           
      Basic              $            1.10   $            0.98           12
      Diluted                         1.09                0.97           12
                                                                           
    Per common share(2)                       
    (dollars)                                                              
    Dividends declared   $            0.46   $            0.41             
    Book value                       23.68               20.76             
    Stock trading range                                                    
      High                           46.86               40.02             
      Low                            41.72               37.53             
      Close                          41.72               39.66             
                                                                           
                                                                           
                         As at January 31,   As at October 31,
                                      2014                2013 (1) % Change
                                                                           
    Financial position                                                     
    Total assets         $         195,300   $         188,219            4
    Loans and                                 
    acceptances                     99,722              97,338            2
    Deposits                       111,248             102,111            9
    Subordinated debt                         
    and equity                      11,098              11,379          (2)
    Capital ratios under                      
    Basel III(4)                                                           
      Common Equity Tier                   %                               
      1 (CET1)                         8.3                 8.7   %
      Tier 1                          10.7 %              11.4   %         
      Total                           13.6 %              15.0   %         
    Impaired loans, net                       
    of total allowances              (172)               (183)             
      As a % of average                    %                               
      loans and
      acceptances                    (0.2)               (0.2)   %
    Assets under                              
    administration and
    under management               309,653            258,010            20
    Total personal                            
    savings                        161,827            157,515             3
    Interest coverage                13.58               11.18             
    Asset coverage                    3.45                3.76             
                                                                           
    Other information                                                      
    Number of employees             19,784              19,691      −
    Number of branches                        
    in Canada                          451                 453      −
    Number of banking                         
    machines                           938                 937      −
    (1)      Certain amounts have been adjusted to reflect changes in
             accounting standards. See Note 2 to the unaudited interim
             condensed consolidated financial statements in the Report to
             Shareholders for the first quarter ended January 31, 2014.
    (2)      Reflecting the impact of the common stock split. See Note 13
             to the unaudited interim condensed consolidated financial
             statements in the Report to Shareholders for the first quarter
             ended January 31, 2014.
    (3)      See the Financial Reporting Method section on page 4.
    (4)      The ratios have been calculated using the "all-in"
             methodology, and the October 31, 2013 ratios have not been
             adjusted to reflect changes in accounting standards.
    FINANCIAL REPORTING METHOD
    (millions of Canadian dollars, except per share amounts)
     
    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 CPA Canada 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.
     
    Finanancial Information
     
    Quarter ended January 31                  2014       2013  (1) % Change
                                                                           
    Excluding specified items                                              
      Personal and Commercial                  168        163            3 
      Wealth Management                         76         53           43 
      Financial Markets                        144        113           27 
      Other                                     (4)        15              
                                                                           
    Net income excluding specified items       384        344           12 
      Items related to holding                                             
      restructured note(2)                      30          9 
      Acquisition-related items(3)              (9)        (6)             
      Item related to employee benefits                                    
      (4)                                  −         26 
    Net income                                 405        373            9 
                                                                           
    Diluted earnings per share excluding
    specified items(5)                   $    1.09    $  0.97           12 
      Items related to holding                                             
      restructured notes(2)                   0.09       0.03 
      Acquisition-related items(3)           (0.03)     (0.03)             
      Item related to employee benefits                                    
      (4)                                  −       0.08 
    Diluted earnings per share(5)        $    1.15    $  1.05           10 
                                                                           
    Return on common shareholders'
    equity                                                                 
      Including specified items               19.8  %    20.7    %         
      Excluding specified items               18.8  %    19.0    %         
    (1)   Certain amounts have been adjusted to reflect changes in
          accounting standards. See Note 2 to the unaudited interim
          condensed consolidated financial statements in the Report to
          Shareholders for the first quarter ended January 31, 2014.
    (2)   During the quarter ended January 31, 2014, the Bank recorded
          $5 million in financing costs ($3 million net of income taxes)
          related to holding restructured notes. It also recorded
          $45 million in revenues ($33 million net of income taxes) to
          reflect the rise in the fair value of these notes (2013:
          $12 million in revenues ($9 million net of income taxes) to
          reflect the rise in the fair value of the commercial paper not
          included in the Pan-Canadian restructuring plan).
    (3)   During the quarter ended January 31, 2014, the Bank recorded
          $11 million in charges ($9 million net of income taxes) related
          mainly to the Wealth Management acquisitions and consisting
          mostly of retention bonuses (2013: $8 million, $6 million net of
          income taxes) in addition to the Bank's share in the integration
          costs incurred by Fiera and its share in the integration costs
          and intangible asset amortization related to the Bank's interest
          in TMX.
    (4)   During the quarter ended January 31, 2013, the Bank recorded a
          $35 million decrease ($26 million net of income taxes) in past
          service costs to reflect changes to the provisions of its pension
          plans and other post-retirement plans subsequent to changes in
          accounting standards.
    (5)   Reflecting the impact of the common stock split. See Note 13 to
          the unaudited interim condensed consolidated financial statements
          in the Report to Shareholders for the first quarter ended January
          31, 2014.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

------------------------------

From time to time, 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 2013 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 2014 and the objectives it has set for itself for that period. These 
forward-looking statements are made in accordance with 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 2014 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 strategic 
risk, credit risk, market risk, liquidity risk, operational risk, regulatory 
risk, reputation risk, and environmental risk, which are described in more 
detail in the "Risk Management" section beginning on page 60 of the 2013 
Annual Report, and in particular 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 regulatory 
changes affecting the Bank's business, capital and liquidity; 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 (including the new reporting regime set out in 
sections 1471 to 1474 of the U.S. Internal Revenue Code of 1986 (FATCA)); and 
changes to capital adequacy 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 2013 Annual Report. Investors and others who rely 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 2014 RESULTS 

------------------------------

Conference Call
        --  A conference call for analysts and institutional investors will
            be held on Tuesday, February 25, 2014 at 11 a.m. EST.
        --  Access by telephone in listen-only mode: 1-866-862-3930 or
            416-695-7806. The access code is 3390539#.
        --  A recording of the conference call can be heard until
            March 6, 2014 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 consolidated 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.



SOURCE  National Bank of Canada 
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 Assistant Vice-President Public Affairs 514-394-8644  
Hélène Baril Senior Director Investor Relations 514-394-0296   
To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/February2014/24/c6629.html 
CO: National Bank of Canada
ST: Quebec
NI: FIN ERN  
-0- Feb/24/2014 22:00 GMT
 
 
Press spacebar to pause and continue. Press esc to stop.