Thursday, 18 July 2024
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CanadaFinance

The National Bank of Canada reports strong Q4 results

  • A 7% increase in pre-tax pre-provision earnings as indicated by the National Bank of Canada.
  • Pre-tax pre-provision earnings increased by 16% and 8%.
  • In 2023, the bank recorded over $10 billion in revenue, a record, while keeping its efficiency ratio under 53%.

A 7% increase in pre-tax pre-provision earnings over the prior year was indicated by the National Bank of Canada’s (NTIOF) robust earnings per share figures of $2.44 for Q4 2023 and $9.60 for the entire year.

The bank is in a good position for 2024 despite the weakening Canadian economy thanks to its diverse business mix, strict capital, cost, and credit management policies, and strong performance across all business segments.

National Bank of Canada

The company’s goal dividend payout ratio range of 40% to 50% and a 16.8% return on equity are the two main takeaways from the call. Pre-tax pre-provision earnings increased by 16% and 8%, respectively, in 2023 for the Personal and Commercial Banking segment and Wealth Management, indicating impressive performance.

With a net income of more than $1 billion, the Financial Markets industry is predicted to keep expanding through 2024. With revenues rising 13% in the fourth quarter of 2023 and ABA Bank projecting double-digit asset growth in 2024, Credigy and ABA Bank had a successful year in 2023.

In Q42023, non-trading net interest income decreased by 1% sequentially; however, the bank anticipates positive operating leverage and mid-single-digit pre-tax pre-provision earnings growth in 2024. By taking a defensive stance and practicing strict risk management, the bank’s credit portfolio performed well in 2023.

The bank has positioned itself well despite a difficult economic outlook thanks to its diversified business mix and strict capital, cost, and credit management procedures. In 2023, the bank recorded over $10 billion in revenue, a record, while keeping its efficiency ratio under 53%.

At the end of the year, the bank’s net stable funding ratio of 118% and its liquidity coverage ratio of 155%, both significantly above regulatory requirements, demonstrate how strong its liquidity position is. With room for both sustainable dividend increases and capital deployment, the CET1 ratio—which is currently at 13.5%—is predicted to hold steady.

The bank anticipates that tax reforms won’t have a major impact on strategy or deployment and that in 2024, the financial markets will see positive net income growth in addition to new business opportunities in the global capital markets. The bank has avoided restructuring charges by being proactive in controlling headcount and expenses.

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