National Bank of Canada Shares
National Bank of Canada holds the sixth position amongst the leading banks of Canada. With 446 branches in Canada and worldwide, National Bank of Canada serves over 2 million clients and employs over 17 thousand professionals. Headquartered in Montreal, the bank is registered as NA on the Toronto Stock Exchange.
National bank of Canada has been actively participating in the international capital markets in the past few decades and has been investing in brokerage, mutual funds, retirement solutions and wealth management. Many of these services are run not directly by the bank but its subsidiaries.
The year 2009 has been looking up for investors, as it has shown total earnings of C$ 303 Millions, a leap of 6% in comparison from last year. The Tier capital ratio, which is the direct indicator of a bank’s sustainability, is at a decent 10.5% and total capital ratio was approximately 14%. The dividend payout is at a high of 40%. With approximate dividends of C$ 2 per share and earnings of almost C$ 1.78, the share price has been climbing up steadily and is approximately at C$ 59. The return of equity is 21%.
The bank’s exceptional performance in the first nine months of the year has been contributed by some factors like the tax costs of the assets backed financial paper ABCP (Asset-Backed Commercial Paper) and the merger of the Toronto Stock exchange and the Montreal Stock exchange, the latter being directly responsible for a C$ 53 M gain as a result of after-tax-gain.
The loan portfolio of the bank was also stable, and a marked increase in the gains showed that the client base was still strong in spite of the floundering economic conditions. The loan segment’s provision for credit losses increased to a total of C$ 7 M, and stood at an enviable high of C$ 54 M at the end of the third financial quarter. Consumer loans were also seen on a rise as were business loans, in number as well as volume. The increase in volume was a notable 8%, the greatest increase being in the segment of Small and Medium Enterprises. The interest rates of this segment were narrowed, as result of the turbulent economic weather, and the rates were at 2.45%, compared to 2.67% of last year’s. But this decision has been applauded by the banks customer base, and will in the long run, bear good news for the bank and its interests.
It is important to mention that the bank also reported a loss of C$ 23 M, but compared to the losses of 2008, which stood at C$ 43 M, is much less. But the reason for loss remains the same as last year – i.e. higher securitization revenue, which climbed another C$ 35 million to stand at C$ 95 M at the end of the third financial quarter.
Analysts are positive about the earnings reflected by the National Bank of Canada and the verdict is unanimous: It is a safe bet in the turbulent times of today.