National Bank reports its results for the Second Quarter of 2014 and raises its quarterly dividend by 4% to 48 cents per share

 National Bank reports its results for the Second Quarter of 2014 and raises  its quarterly dividend by 4% to 48 cents per share  The financial information reported herein is based on the unaudited interim  condensed consolidated financial statements for the second quarter and first  six months ended April 30, 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.  Additional information about National Bank of Canada, including the Report to  shareholders - Second 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.  All amounts are presented in Canadian dollars.  MONTREAL, May 27, 2014 /CNW Telbec/ - For the second quarter of fiscal 2014,  National Bank is reporting $362 million in net income versus $417 million in  the second quarter of 2013 and diluted earnings per share of $1.01 compared to  $1.20 in the second quarter of 2013, particularly due to a $102 million rise  in the fair value of restructured notes that had been recorded in the second  quarter of 2013.  Excluding the specified items described on page 4, second-quarter net income  totalled $375 million, up 7% from $352 million in the second quarter of 2013,  and second-quarter diluted earnings per share stood at $1.05, up 5% from $1.00  in the same quarter of 2013.  For the first six months of fiscal 2014, the Bank's net income totalled $767  million versus $790 million in the same period of 2013. First-half diluted  earnings per share stood at $2.16 compared to $2.25 in the same period of  2013. Excluding the specified items described on page 4, first-half net income  totalled $759 million, up 9% from $696 million in the same period of 2013, and  first-half diluted earnings per share stood at $2.14, up 9% from $1.97 in the  same period of 2013.  "National Bank delivered another good quarter with strong performance from the  Wealth Management and P&C Banking segments," said Louis Vachon, President and  Chief Executive Officer. "With the quality of our results and our continuous  efforts with the One client, one bank initiative, we are pleased to increase  the quarterly dividend by 4%."  Highlights:            --  $362 million in net income for the second quarter of 2014             versus $417 million in the same quarter last year, particularly             due to a $102 million rise in the fair value of restructured             notes in 2013;         --  Diluted earnings per share of $1.01 for the second quarter of             2014 compared to $1.20 in the same quarter of 2013;         --  Return on equity of 17.4%;         --  The Common Equity Tier 1 (CET1) capital ratio under Basel III             was 8.7% as at April 30, 2014, remaining stable versus 8.7% as             at October 31, 2013.  Highlights Excluding Specified Items((1)):         --  $375 million in net income for the second quarter of 2014, up             7% from $352 million in the same quarter of 2013;         --  Diluted earnings per share of $1.05 for the second quarter of             2014, up 5% from $1.00 in the same quarter of 2013;         --  Return on equity of 18.1%.  Financial Indicators                                   Results                     Results                                     excluding       Results     excluding                                                       First                     Results     specified          half     specified                         Q2 2014         items (1)      2014         items (1)                                                                               Growth in     diluted     earnings per     share              (16) %           5   %       (4) %           9   %     Return on     common     shareholders'     equity             17.4 %        18.1   %      18.6 %        18.4   %     Dividend     payout ratio         42 %          43   %        42 %          43   %     CET1 capital     ratio under     Basel III           8.7 %                       8.7 %                     (1) See the Financial Reporting Method section on page 4.     Personal and Commercial         --  Net income totalled $162 million in the second quarter of 2014,             up 6% from $153 million in the second quarter of 2013.         --  At $649 million, second-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, in addition to 5% growth             in commercial lending from a year ago.         --  The net interest margin was 2.24% in the second quarter of 2014             versus 2.25% the preceding quarter and 2.31% in the second             quarter of 2013.         --  Before provisions for credit losses and income taxes, the             segment's contribution rose $12 million or 5%.         --  At 57.9%, the efficiency ratio improved from 58.6% in the             second quarter of 2013.  Wealth Management         --  Net income totalled $68 million in the second quarter of 2014,             a 39% increase from $49 million in the same quarter of 2013.         --  Excluding specified items(1), net income totalled $77 million,             up $22 million or 40%.         --  Second-quarter total revenues amounted to $330 million versus             $288 million in the same quarter of 2013, a $42 million or 15%             increase that was driven particularly by growth across all             revenue streams and by the TD Waterhouse acquisition.         --  Second-quarter non-interest expenses stood at $237 million, up             7% year over year.         --  Excluding specified items(1), the efficiency ratio was 68.4%,             an improvement from 73.8% in the second quarter of 2013.  Financial Markets         --  Net income totalled $128 million in the second quarter of 2014,             down 9% from $141 million in the same quarter of 2013.         --  At $337 million, second-quarter revenues decreased $26 million             or 7% year over year, mainly because trading activity revenues             were down, in particular the revenues generated by fixed-income             trading activities and commodities and foreign exchange trading             activities.         --  At $162 million, the second-quarter non-interest expenses             decreased $7 million year over year, particularly because             variable compensation was lower given the revenue decline.         --  The efficiency ratio was 48.1% in the second quarter of 2014             versus 46.6% in the second quarter of last year.  Other         --  Net income totalled $4 million for the second quarter of 2014             versus $74 million in the same quarter of 2013, a decrease that             stems mainly from the following amounts, net of income taxes,             that had been recorded in the second quarter of 2013: a             $102 million rise in the fair value of the restructured notes             partly offset by $29 million in intangible asset impairment             losses.  Capital Management         --  As at April 30, 2014, the Common Equity Tier 1 (CET1) capital             ratio under Basel III was 8.7%, remaining stable versus 8.7% as             at October 31, 2013, as internally generated capital was offset             by the Wealth Management acquisition and 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 April 30                 Six months ended April 30                                                   %                                         %                       2014        2013 (1)   Change        2014            2013 (1)    Change                                                                                                   Operating     results                                                                                       Total revenues $ 1,276     $ 1,383          (8)   $   2,640     $     2,615             1     Net income         362         417         (13)         767             790           (3)     Net income     attributable     to the Bank's     shareholders       345         402         (14)         734             758           (3)     Return on     common     shareholders'     equity            17.4 %      23.4   %                 18.6 %          22.1   %               Earnings per     share(2)     (dollars)                                                                                       Basic        $  1.02     $  1.21         (16)   $    2.19     $      2.27           (4)       Diluted         1.01        1.20         (16)        2.16            2.25           (4)                                                                                                   EXCLUDING     SPECIFIED     ITEMS(3)                                                                                      Operating     results                                                                                       Total revenues $ 1,283     $ 1,248            3   $   2,609     $     2,470             6     Net income         375         352            7         759             696             9     Net income     attributable     to the Bank's     shareholders       358         337            6         726             664             9     Return on     common     shareholders'     equity            18.1 %      19.6   %                 18.4 %          19.3   %               Earnings per     share(2)     (dollars)                                                                                       Basic        $  1.06     $  1.01            5   $    2.16     $      1.99             9       Diluted         1.05        1.00            5        2.14            1.97             9                                                                                                   Per common     share(2)     (dollars)                                                                                     Dividends     declared       $  0.46     $  0.41                $    0.92     $      0.82                   Book value                                            24.43           21.57                   Stock trading     range                                                                                           High           45.73       39.76                    46.86           40.02                     Low            41.60       36.18                    41.60           36.18                     Close          45.49       38.08                    45.49           38.08                                                                                                                                                                       As at           As at                                                       April 30,     October 31,             %                                                            2014            2013 (1)    Change                                                                                                   Financial     position                                                                                      Total assets                                      $ 194,289     $   188,219             3     Loans and     acceptances                                         101,555          97,338             4     Deposits                                            110,794         102,111             9     Equity     attributable     to common     shareholders                                          8,005           7,487             7     Capital ratios     under Basel     III(4)                                                                                          Common       Equity Tier       1 (CET1)                                              8.7 %           8.7   %                 Tier 1                                               11.6 %          11.4   %                 Total                                                14.6 %          15.0   %               Impaired     loans, net of     total     allowances                                            (175)           (183)                     As a % of       average       loans and       acceptances                                         (0.2) %         (0.2)   %               Assets under     administration     and under     management                                          327,125         258,010            27     Total personal     savings                                             168,329         157,515             7     Interest     coverage                                              13.03           11.18                   Asset coverage                                         4.79            3.76                                                                                                                 Other     information                                                                                   Number of     employees                                            19,831          19,691             1     Number of     branches in     Canada                                                  451             453       −     Number of     banking     machines                                                935             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 second quarter and six-month period ended April 30, 2014.     (2) Reflecting the stock dividend paid on February 13, 2014. See Note         13 to the unaudited interim condensed consolidated financial         statements in the Report to Shareholders for the second quarter and         six-month period ended April 30, 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.        Financial Information                                                                                                                                                                                                               Quarter ended April 30             Six months ended April 30                                                              %                                     %                                2014          2013 (1)   Change        2014         2013 (1)   Change                                                                                                          Excluding specified     items                                                                                                  Personal and       Commercial                162           153            6         330          316            4       Wealth Management          77            55           40         153          108           42       Financial Markets         128           141          (9)         272          254            7       Other                       8             3                        4           18                                                                                                                       Net income excluding     specified items             375           352            7         759          696            9       Items related to       holding       restructured notes       (2)                       (3)           100                       27          109                    Acquisition-related       items(3)                 (10)           (6)                     (19)         (12)                    Impairment losses       on intangible       assets(4)             −          (29)                  −         (29)                    Item related to       employee benefits       (5)                   −       −                  −           26                  Net income                  362           417         (13)         767          790          (3)                                                                                                          Diluted earnings per     share excluding     specified items(6)    $    1.05     $    1.00            5   $    2.14     $   1.97            9       Items related to       holding       restructured notes       (2)                    (0.01)          0.31                     0.08         0.34                    Acquisition-related       items(3)               (0.03)        (0.02)                   (0.06)       (0.05)                    Impairment losses       on intangible       assets(4)             −        (0.09)                  −       (0.09)                    Item related to       employee benefits       (5)                   −       −                  −         0.08                  Diluted earnings per     share(6)              $    1.01     $    1.20         (16)   $    2.16     $   2.25          (4)                                                                                                          Return on common     shareholders' equity                                                                                   Including specified       items                    17.4 %        23.4   %                 18.6 %       22.1   %                Excluding specified       items                    18.1 %        19.6   %                 18.4 %       19.3   %              (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 second quarter and six-month period ended April 30, 2014.     (2) During the quarter ended April 30, 2014, the Bank recorded         $4 million in financing costs ($3 million net of income taxes)         related to holding restructured notes (2013: $2 million, $2 million         net of income taxes). In addition, during the quarter ended April         30, 2013, the Bank had recorded $139 million in revenues         ($102 million net of income taxes) to reflect a rise in the fair         value of those notes. During the six months ended April 30, 2014,         the Bank recorded $9 million in financing costs ($6 million net of         income taxes) related to holding restructured notes (2013:         $2 million, $2 million net of income taxes) and $45 million in         revenues ($33 million net of income taxes) to reflect a rise in the         fair value of those notes (2013: $151 million, $111 million net of         income taxes).     (3) During the quarter ended April 30, 2014, the Bank recorded         $13 million in charges ($10 million net of income taxes) related to         the Wealth Management acquisitions (2013: $9 million, $6 million         net of income taxes) and consisting mostly of retention bonuses and         TD Waterhouse integration charges; they also include 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. For the six months ended April 30,         2014, the charges amounted to $24 million ($19 million net of         income taxes) compared to $17 million ($12 million net of income         taxes) for the same period of 2013.     (4) During the quarter ended April 30, 2013, the Bank had recorded         $39 million ($29 million net of income taxes) in intangible asset         impairment losses on internal technology developments.     (5) During the quarter ended January 31, 2013, the Bank had recorded a         $35 million decrease in past service costs ($26 million net of         income taxes) to reflect changes to the provisions of its pension         plans and other post-retirement plans subsequent to changes in         accounting standards.     (6) Reflecting the stock dividend paid on February 13, 2014. See Note         13 to the unaudited interim condensed consolidated financial         statements in the Report to Shareholders for the second quarter and         six-month period ended April 30, 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 SECOND QUARTER 2014 RESULTS  Conference Call         --  A conference call for analysts and institutional investors will             be held on Wednesday, May 28, 2014 at 11 a.m. EDT.         --  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             June 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 Vice-President Public Affairs and Investor Relations 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/May2014/27/c9953.html  CO: National Bank of Canada ST: Quebec NI: FIN CONF DIV ERN  
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